Significant Decline in Freight Rates Across Various Maritime Transport Sectors: Will the Downward Trend Continue?

The maritime transport market, as one of the main pillars of global trade, is constantly influenced by various factors such as weather conditions, economic developments, and changes in supply and demand. The weekly maritime transport market report, prepared in collaboration with the Baltic Exchange, examines recent trends in different segments of this industry. This report includes an analysis of the dry bulk and tanker markets, providing comprehensive information on freight rates, trade activities, and influential events.

In the week ending February 14, 2025, the market experienced fluctuations due to several factors, including adverse weather conditions, unforeseen incidents, and changes in global demand. This report provides a detailed review of these developments in the Capesize, Panamax, Ultramax/Supramax, and Handysize dry bulk sectors, as well as the VLCC, Suezmax, Aframax, and Clean tanker segments.

The purpose of this report is to present a clear picture of the current market situation and assist industry stakeholders in making informed decisions regarding freight rates, investments, and business planning. By studying this report, readers can stay updated on the latest market developments and anticipate future trends.

Note: This report is exclusively prepared for the members of FONASBA.

Capesize Ships

The Capesize market showed a downward trend this week. The 5TC index initially declined over the first three days but stabilized at $5,939 by the end of the week, marking a decrease of over $1,000 compared to the previous week—the lowest level since late February 2023.

Key Disruptions:

• Cyclonic storms in Western Australia disrupted operations at Port Hedland and Dampier.
• Fire at the Praia Mole coal terminal in Brazil was reported.

Key Routes:

• C3 (Tubarao to Qingdao): $16,755
• C5 (Western Australia to Qingdao): $6.03

Competition in the South Atlantic: Increasing ballast ships in the region led to greater competition for transatlantic trade.

Index-Based Transactions:

• C8 (Transatlantic): $3,643
• C9 (Fronthaul): $24,906

A Newcastlemax vessel (208,000 DWT) was chartered for 20-22 months at $26,000 per day.

Panamax Ships

The Panamax market remained under persistent downward pressure on freight rates.

North Atlantic: Decline in charterers’ offers, particularly for transatlantic routes.

South America:

• Freight rates for prompt dates declined, but support was observed for index dates.
• Example: An 82,000 DWT vessel in Singapore was chartered for a South American voyage at $10,000 per day.

Asia:

• Strong activity early in the week, but rates stabilized towards the end.

Average Freight Rates:

• NoPac Routes: Around $10,000
• Australia Routes: Around $9,000

Long-Term Fixtures:

• 82,000 DWT vessel in China for 5-7 months at $14,750 per day.
• 85,000 DWT vessel in Bangladesh for 11-13 months at $14,750 per day.

Ultramax/Supramax Ships

This segment saw rising demand and increasing freight rates.

Atlantic Ocean:

• U.S. Gulf: A 63,000 DWT vessel was chartered for a Far East voyage at $19,000 per day.
• South Atlantic: A 63,000 DWT vessel from Recalada to Continent at $20,000 per day.

Asia:

• A 63,000 DWT vessel from South China to Australia at $10,000 per day.
• Increased demand for backhaul routes: A 58,000 DWT vessel from China to the Mediterranean at $10,000 per day.

Indian Ocean:

• A 56,000 DWT vessel from Port Elizabeth to China at $9,000 per day + $90,000 ballast bonus.

Long-Term Fixtures:

• A 56,000 DWT vessel in the Mediterranean for 4-6 months at $11,000 per day.

Handysize Ships

The Handysize market showed mixed performance across regions:

Continent & Mediterranean: Stable, supported by healthy cargo flow (scrap and bulk).

• Example: A 35,000 DWT vessel chartered for a Continent to East Mediterranean voyage at $9,000 per day.

South Atlantic: Strong demand for larger vessels.

• Example: A 40,000 DWT vessel from Recalada to Central America (West) at $18,000 per day.

U.S. Gulf: Slight recovery in freight rates, but low activity.

• Example: A 38,000 DWT vessel carrying agricultural products at $11,800 per day.

Asia: Strong market with balanced supply and demand.

• Example: A 40,000 DWT vessel from Gunsan to West India at $12,000 per day.

Tanker Segment

VLCC Tankers

• Gulf to China (TD3C): WS59.40 (down 7 points)
• TCE: $37,525
• West Africa to China (TD15): WS62 (down 6 points)
• TCE: $40,000
• U.S. Gulf to China (TD22): $8,347,500 (down $500,000)
• TCE: $41,811

Suezmax Tankers

• Nigeria to Europe (TD20): WS88.61 (down 6 points)
• TCE: $34,785
• CPC to Med (TD6): WS104.50 (up 5 points, due to 39 scheduled cargoes for March)
• TCE: $41,011

Aframax Tankers

• North Sea (TD7): WS107.5 (steady)
• Mediterranean (TD19): WS153.06 (up 20 points)
• TCE: $44,666

Clean Tankers

LR2

• Gulf to Japan (TC1): WS125.56 (up 22.5 points)

LR1

• Gulf to Japan (TC5): WS129.69 (up 8.75 points)

MR

• Gulf to East Africa (TC17): WS190 (steady)
• U.S. Gulf (TC14): WS94.29 (down)

Handymax

• Mediterranean (TC6): WS166.39 (down 33.05 points)

This report is exclusively prepared for FONASBA members.