BLK Shipping – Shipping Rates Updates

2 OCTOBER 2021

Welcome to BLK Shipping, our regular update from the shipping market. In this issue, we’ll be covering:

• Wet Cargo
• Dry Cargo
• Containers
• Gas

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Wet Cargo

Oversupply of carrying capacity in the market counterbalanced significantly the rising price of oil and the tanker rates kept dropping across the board, with the only exception of VLCCs

Crude Tanker Spot Charter Rates

VLCC – Very Large Crude Carriers were the only vessels with a strong performance, given their direct link to the crude trading. China routes were the busiest with a 3.5 times increase WoW. Outlook: Positive

Suezmax – rates weakened on all routes with the only exception of the Indian Ocean, where Suezmaxes did 9% better than the previous week. Outlook: Stable

Aframax – the Med remained the only area where Aframaxes keep performing, with a general, continued declined that went on throughout September. Outlook: Stable

Crude Tankers Spot Charter Rates

Dirty Products – Relatively busy in the Mediterranean, whilst demand remaining weak in all other regions, with a marked oversupply of carrying capacity. Outlook: Negative.

Clean Products – Charter rates weakened across the board, especially for short voyages. Outlook: Stable 

Product Tanker Spot Cargo Rates

MR – uptake in demand did not have the expected positive effects on MR rates, owing to the oversupply of carrying capacity in the market. Outlook: Negative

LR1 – demand for log-range tankers fell in the last few weeks. Outlook: Negative

LR2 – continued decline in LR rates would appear to continue on this trend as plenty of vessels remain unemployed. Outlook: Negative

Handy – Handy earnings bounced back below $4000/day with a weakened performance on all routes except the Med. Outlook: Stable

Dirty Panamax – Rates continued softening pretty much all routes, with a recorded drops up to 30% WoW. Outlook: Stable

Product Tanker Spot Rates

Dry Cargo

Bulk carrier rates rallied during the past week with a market “on fire”and at its highest since 2008. WoW growth recorded up to 44%, pushing capesize rates beyond $60k/day on some routes.

Bulk Carrier Spot Cargo Earnings per day

Capesize – Capes were the strongest performers in a very active market, characterised by a strong demand and an undersupply of carrying capacity Outlook: Positive

Panamax  – Still another good week for the panamaxes, with an average growth of 5% across the board and a decisively positive outlook. Outlook: Positive

Supramax – Supramaxes remained relatively stable, with recorded variations up to 3% and average rates just north of $31,500/day Outlook: Stable

Handysize – small-sized bulkers did relatively well in the past couple of weeks, with a continual growth now averaging $34k+/day and voyage charters smashing through $40k/day on South-American routes. Outlook: Positive

Bulk Carrier Spot Charter Rates

Container

Container rates finally look like they’re stabilising, with Neo-panamax vessels settling just above the$145k/day mark and container prices on the routes China-Europe recording an inflexion for the first time in months.

Container Vessel Average Earnings per TEU per day

On the raw materials side, however, and especially in chemical commodities, the high freight rates keep impacting prices of goods to the extent that it is equivalent or cheaper to source from European suppliers.

This has led to a decrease in smaller-batch shipments westbound from Asia to Europe which, together with the ongoing raw material shortage and increase in prices of Chinese factory outputs, provoked a subsequent easing of the TEU rates. We should continue seeing this trend toward the end of the year and possibly into 2022.

Outlook: Stable

Container Vessel Charter Rates

Gas

Rates for Gas Carriers remained declined slightly, with a 18% hit suffered by for 145,000 m3 LNG Carriers.

Gas Tankers Cargo Rates

This was expected as plenty of tonnage was tied-up in dock for ballast water treatment systems installation and is now slowly coming back into the market, increasing overall supply. Outlook: Stable

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