The USG Supramax spot freight market sentiment remained exceptionally positive throughout the month. Rates kept rising on all routes thanks to intensive flow of cargo orders to the market. Additional support came from United States East Coast (USEC) where increased activity was observed and more coal cargoes were coming to the market. Tonnage supply looked scarce for spot delivery days, while demand was strong, driving a surge in fixing activity, as well as corresponding rates.
Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$30.50/t on average. Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US $37/t on average. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$57.50/t on average.
The market will probably come under pressure from different consequences of the US trade policy.
Thus, USTR fees about come into effect. If vessels are Chinese-owned and/or operated, the fee will be US$50 per net tonne. Despite the fact that a significant share of the dry bulk fleet is either Chinese-built or owned/operated by Chinese entities, broad exemptions cover most trades, and only a relatively small portion of the Chinese-owned or operated fleet will be affected by the fees. As a result, Branvoll expects the direct market disruption to be limited.
But there is another more important consequence of US trade policy. It looks like China orders extremely low US grain volumes. Thus, the lack of long-haul shipments from the US to China will weigh far more heavily on the dry bulk market in the coming month than the USTR-related disruptions.
by Brannvoll ApS, Denmark
