Baltic index falls on broad retreat
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell for the fourth consecutive session on Tuesday, hurt by weaker rates across all vessel segments.
The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, was down 14 points, or 1 percent, at 1,327 points. The capesize index lost 37 points, or 1.7 percent, to end at 2,136 points. Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes such as iron ore and coal, were down $286 to $16,890.
Far East-Europe box freight rates mapping the progress
Container freight rates on the key Far East-Europe route have seen significant volatility over recent years, and after improving in 2017 appear to have eased back again recently. Against this backdrop, comparing trends in cascading and deployed capacity on the trade lane with demand side developments can help to shine some light on the ongoing fluctuation in freight rates. The top of the global trade route hierarchy, and is where most of the new very large boxships are initially deployed upon delivery. Freight rates on the route remain volatile, with continued ‘cascading’ of capacity by operators fundamental to balancing the impact of ongoing deliveries of ‘mega’ boxships and trends in box volume growth.
Shanghai rebar hits near 2-month top
China’s steel rebar futures soared to the highest level in eight weeks on Wednesday, buoyed by a firm physical market that helped run down inventories amid ongoing supply constraints.
The most-active rebar contract for October delivery on the Shanghai Futures Exchange rose 4.3 percent to 3,727 yuan ($586.04) a tonne, after having earlier touched its strongest level since March 7 at 3,729 yuan a tonne. Jiangsu Shagang Group, China’s biggest private-owned steel firm by production capacity, said it will hike spot prices for rebar in May by 130 yuan a tonne to 4,070 yuan.
Lack of fuel subsidies could hasten Asian crude demand destruction
The term “demand destruction” is again entering the lexicon of the current crude oil market as the sharp rise in prices raises concerns about when do consumers start cutting back on their fuel consumption.
While it’s probably impossible to pick the exact point at which this happens, the risk in the current cycle of rising prices is that it happens earlier than in the past in Asia, the main region driving rising crude demand. The reason for this is that many countries in Asia used the prior period of falling crude prices to end, or dramatically scale back, their fuel subsidies.
Panama canal’s new transit of lng to Asia
The Panama Canal welcomed the inaugural transit of the LNG Sakura as it carried the first-ever liquefied natural gas (LNG) shipment from the Dominion Cove Point terminal in the United States to Japan.
The transit, which occurred this past weekend, marks the beginning of a new LNG commercial route between the United States and Asia from the recently inaugurated Dominion Cove Point terminal in Maryland, the second US LNG export terminal to come online after Sabine Pass began operations in 2016. The Panama Canal transited the LNG Sakura over the weekend. Dominion Cove Point has two main clients: ST Cove Point, a consortium consisting of Sumitomo Corporation and Tokyo Gas; and Gail Global LNG, a subsidiary of GAIL LTD of India.
Russia sea ports achieve 12.6pc box throughput growth in q1
Russia’s sea ports from January to March collectively handled 1.198 million TEU, an increase of 12.6 per cent compared to the same period last year, according to data from the Russian Sea Commercial Ports Association.
Over the reporting period, import volumes rose by 14.62 per cent to 527,150 TEU driven by loaded imports, which grew by 16.29 per cent to 502,610 TEU, while volumes of imported empty boxes fell by 11 per cent. Exports were up by 12.89 per cent to 501,560 TEU, with loaded and empty volumes increasing by 12.15 per cent and 14.08 per cent respectively.
Suezmax freight rates at 4-month high
Suezmax freight rates to Europe rose sharply over the last week, with the West Africa-to-UKC rate reaching the highest in four months as the flow of Nigerian crudes to Europe picks up, sources said. S&P Global Platts assessed the WAF-UKC Suezmax dirty freight rate at $9.92/mt Friday.
The last time rates were assessed higher than this was on December 20, 2017, when the rate was at $10.13/mt. The rate for this route has risen sharply of late, rising by $1.98/mt over the last week. The flow of West Africa crudes to Europe has picked up as demand from more traditional key consumer markets to the east, namely India and China, has fallen in the last two months, sources said. Nigerian crudes have seen a lot of competition from the flow of sweet crudes from the US and Mediterranean of late, which could cap the flow of WAF crudes to Europe.
Growing lng supply and Us-Asia trades soak up shipping glut
New liquefied natural gas projects and longer trade routes from the US to Asia are soaking up the surplus LNG shipping capacity that had built up in recent years, executives at an LNG forum in Singapore quoted as saying last week.
Consequently, the LNG shipping market is tightening rapidly, which could lead to a shortage of ships in the next two-three years, especially on the spot market where market participants do not have the protection of long-term charters. Tighter shipping supply is likely to increase LNG freight rates and make it more difficult for US LNG cargoes to reach distant markets in Asia as arbitrage economics get tougher.