USG players see optimistic time ahead

USG players see optimistic time ahead
26 October 2021

By Maria Vasyutenko, associate of Brannvoll ApS

The USG Supramax/Ultramax spot freight market started the month on a weak mode. The North Atlantic was experiencing side effects from the passing of hurricanes, which caused the temporary closure of several terminals in the Mississippi River as well as disruptions in other links of the logistics chain.

Rates for shipments from the USG ports were falling as most charterers preferred to wait until the situation normalised in the Gulf following the hurricane. But in the second half of the month, cargo operations in the Mississippi River started slowly catching up and the USG freight market began to show improved rates.

After ups and downs observed throughout the month, freight rates settled on the last reported levels on transatlantic routes.

Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$34/t (unchanged MoM) on average.
Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US$41/t on average (unchanged MoM).

The freight rates on fronthaul directions (trips to southeast Asia and China) did not increase quite as much as some expected amid a delayed start of the US grain season. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$68/t on average (+US$6/t MoM).

For the rest of the year, USG players are optimistic. USG cargo flow is returning to normal and while not as fast as expected, it is still growing day by day. More grain cargoes are being shipped from USG ports and November is looking very promising. It should be noted that in spite of USG terminals taking steps to address the post-hurricane backlog, many vessels are still sitting in longer-than-usual line-ups. This resumption of activity together with increased delays will lead to a quick heating up of rates.

Published under Cement News

Tagged Under: freight