USG Supramax/Ultramax shows stable market fundamentals

By Brannvoll ApS, Denmark

The USG Supramax/Ultramax freight market started the month on a soft mode, but eventually made a positive turn, slowly but confidently. A tightening tonnage list for spot laycan dates was helping owners to insist on more favourable rates, especially on transatlantic routes. In the second half of May, the market has levelled as the tonnage supply remained largely unchanged WoW and the segment ended up being relatively balanced.

Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$20/t on average. Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US$24/t on average. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$49/t on average.

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

In the near future, Supramax/Ultramax rates are likely to hold steady in the northern part of the Atlantic basin as the balance between tonnage and cargo looks steady for the coming weeks. Nevertheless, the mid-term prospects of the USG market look fragile and the state of the current Supramax/Ultramax segment may prove unsustainable, considering the expected decline in demand for US corn in China.