Negative sentiments spreading in freight markets

Negative sentiments spreading in freight markets
23 June 2022

By Maria Vasyutenko, associate of Brannvoll ApS

The USG Supramax/Ultramax spot freight market came under pressure amid increased tonnage supply in the area. Many vessels are ballasting towards USG regardless of the falling rates, which maintains the pressure on the USG and USEC markets and at once highlights the relative weakness of the European freight market. Thus, the USG market sentiment is soft, fixing activity is limited, and owners with spot vessels are forced to reduce their ideas to find a cover, while a marginal increase in the cargo count is insufficient to offset tonnage building up.

Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are estimated at US$41/t on average, down US$6 MoM. Freight rates for the transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$35/t, down US$5/t MoM, on average. Shipping costs for the delivery of a Supramax-lot of petcoke from USG to EC India are at US$64/t on average, representing a drop of US$2/t MoM.

 Supramax freight rates for petcoke from Houston, USA

The USG market outlook is negative for the nearby future amid excessive tonnage supply and a long list of ballasters from Europe. The Mediterranean area will remain weak and oversupplied with ships repositioned from the Black Sea, which also puts pressure on other European freight markets. The falling Panamax market and weak FFA segment only add to the overall negative sentiment in the region.

Published under Cement News

Tagged Under: freight