03 Feb 2022 | 08:19 UTC

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

S&P Global Platts has launched 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 and particulate matters.

Platts first announced the launch of the TCE assessments and weighted average index in a subscriber note published Jan. 24: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/012422-platts-to-launch-tce-assessments-weighted-average-index-for-lng-fueled-newcastlemaxes-feb-3.

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 reflect the $/day pricing derived from the respective voyage rates published on a $/mt basis in Platts Dry Freight Wire and are 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, 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) are 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 three-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 used to calculate the new NMAX GT4 Index are 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 are assessed basis the Asia market close at 5:30 pm Singapore time (0930 GMT), and follow the Singapore publishing schedule. The PNTCE7G assessment is calculated using the most recent available Rotterdam LNG bunker assessment.

These assessments are 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.

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