The USG Supramax freight market grappled with uncertainty during the first half of the month in the midst of tariff disputes between the US, China and others. The announced fees for Chinese built and flagged vessels have been significantly diluted since the initial proposal, including various exemptions.
Although there is now greater clarity, this has not translated into a positive effect on the spot market, which has an oversupply of vessels. Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at an average of US$16.50/t. Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US$20/t on average. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$34/t on average.
The USG freight market is expected to be supported by the gradual increase in cargo offers in the near future. Due to various exemptions, US Trade Representative (USTR) fees will not have a noticeable negative impact on the local market. Note the USTR regulation is vaguely formulated, leaving room for interpretation, and new details may come up soon.
by Brannvoll ApS, Denmark
