24 Jan 2022 | 03:40 UTC

Platts to launch TCE assessments, weighted average index for LNG-fueled Newcastlemaxes Feb 3

S&P Global Platts will launch time charter equivalent (TCE) assessments for 209,000 dwt Newcastlemax class dry bulk ships using LNG as bunker fuel on six key routes and a ton-mile weighted average index named NMAX GT4, from Feb. 3, 2022, in light of growing efforts by the shipping industry to embrace alternative fuels to reduce greenhouse gas (GHG) emissions.

According to a study commissioned by industry coalition SEA/LNG and the Society for Gas as a Marine Fuel (SGMF), using LNG as a marine fuel could help cut GHG emissions by 21% compared with oil-based marine fuels over the entire life cycle of a commodity cargo. The use of LNG curtails pollutants such as sulfur oxide (SOx), nitrogen oxide (NOx) and particulate matters.

Presently, there are 20 LNG-powered Newcastlemaxes on order, according to shipping industry executives, with several shipowners telling Platts they are considering the purchase of this class of LNG-fueled bulkers in future.

Two LNG-powered Capesize vessels are currently in operation, while the first of the larger Newcastlemax class ships is expected to be commissioned during early 2022.

The new TCE assessments will reflect the $/day pricing derived from the respective voyage rates published on a $/mt basis in Platts Dry Freight Wire and will be calculated using LNG bunker fuel prices published by Platts.

The port charges, vessel speed and fuel consumption used in the TCE calculations are arrived at by extensive market survey and reflect expected market standards. These can be found at http://plts.co/sxp930s7LB7 .

The new TCE assessments are:

Route

Load Port

Discharge Port

Vessel Delivery

Bunkering Port

Code (daily)

Code (monthly average)

PNTCE5G

Port Hedland, Western Australia

Qingdao, China

China-Japan range

Singapore

PHQNA00

PHQNA03

PNTCE8G

Saldanha Bay, South Africa

Qingdao, China

China-Japan range

Singapore

SBQNA00

SBQNA03

PNTCE3AG

Tubarao, Brazil

Qingdao, China

China-Japan range

Singapore

TQPRA00

TQPRA03

PNTCE3BG

Tubarao, Brazil Qingdao

Qingdao, China

ARA range/passing Passero

Singapore

TQFHA00

TQFHA03

PNTCE7G

Puerto Bolivar, Colombia

Rotterdam, Netherlands

ARA range/passing Passero

Rotterdam

PBRNA00

PBRNA03

PNTCE19G

Hay Point, Australia

Rotterdam, Netherlands

China-Japan range

Singapore

HPRNA00

HPRNA03

The new NMAX GT4 Index assessment (daily code: NMGTA00, monthly average code: NMGTA03) will be derived by applying an allocated weighting to the daily TCE assessments of four key round voyages.

Weighting for the individual TCE assessments is determined by the volume of Capesize and Newcastlemax vessel movements observed between the regions associated with the respective voyages over a 3-year period from Platts cFlow trade-flow analytics software, calculated in ton-miles. Ton-mile demand is calculated by multiplying the volume of cargo moved in metric tons by distance traveled in miles.

The TCE assessments and weightings that will be used to calculate the new NMAX GT4 Index would be as follows, based on flows observed over Jan. 1, 2017 to Dec. 31, 2019.

Route

Voyage

Weighting (%)

PNTCE5G

Port Hedland, Western Australia-Qingdao,China

46%

PNTCE3AG

Tubarao, Brazil-Qingdao, China

45%

PNTCE8G

Saldanha Bay, South Africa-Qingdao, China

6%

PNTCE7G

Puerto Bolivar, Colombia-Rotterdam, Netherlands

3%

The new TCE assessments and NMAX GT4 Index will be assessed basis the Asia market close at 5:30 pm Singapore time (0930 GMT), and will follow the Singapore publishing schedule. The PNTCE7G assessment will be calculated using the most recent available Rotterdam LNG bunker assessment.

These assessments will be published in the Platts Dry Freight Wire, on Platts Shipping Alert pages 612, 613, 614 and 615, and in the Platts price database under the codes above.

Please send all comments or questions to shipping@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.