Freight rates have potential to go higher after consolidation

Freight rates have potential to go higher after consolidation
26 April 2023

By Brannvoll ApS, Denmark

The USG Supramax freight market was taking a breather as charterers stepped away after the push in rates observed last month.

Rates were slipping due to a lack of fronthaul activity. While the shipping volumes of transatlantic cargoes were steady, the lack of outbound grain and petcoke stems halted the market’s upwards trajectory.

Figure 1: Supramax freight rates for petcoke from Houston, USA, March 2019-April 2023

As shown in Figure 1, freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$20.50/t (-US$1/t MoM) on average.

Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US$24.50/t  on average, down US$1 when compared with the previous month.

Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$41.5/t on average, representing a MoM drop of US$1.5/t.

USG Supramax market fundamentals look increasingly supportive moving forward as cargo replenishment turns to be sustained at healthier levels. The market shows a decent clear-out of tonnage, while more transatlantic offers are coming into the market for April dates.

Additional support can be expected from the seasonally-strengthening South American market as the grain season in this region is confidently gaining momentum.

Published under Cement News

Tagged Under: freight supramax ultramax petcoke