By Maria Vasyutenko, associate of Brannvoll ApS, Denmark

The USG Supramax/Ultramax spot freight market is slowly recovering after a significant rate fall observed last month. Tonnage supply started shortening once owners and charterers began seeking to cover their positions before the holiday mood begins. Thus, USG rates were well-supported amid decent demand with more and more positional opportunities starting to appear. It should be noted that the grain flow to China is the main driver that allows owners to push rates up fast, while the transatlantic segment experiences slower pace of rate growth.

After ups and downs observed throughout the month, freight rates on transatlantic routes settled on lower levels than last month. Freight rates for the transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$34/t (-US$2/t MoM) 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.

The freight rates on fronthaul directions (trips to southeast Asia and China) showed quite a big jump in rates as the US grain season is gaining momentum fast enough after its delayed start. A pre-holiday spike of activity in the fronthaul segment also adds positivity to owners’ mood. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$74/t on average (+US$2/t MoM).

Looking ahead, USG shipowners are optimistic for the rest of the year. USG freight rates are expected to show further gains amid strong grain demand from Chinese importers during the last month of the year when the market is traditionally strong and rates reach their highest levels. 

Published under Cement News