Platts to launch five dry bulk implied freight rates June 1

(This content has been updated since last published. The new launch date will be June 1.)

S&P Global Platts will start publishing five implied calculated freight rates for Capesize, Panamax and Supramax dry bulk routes for grains and coal shipments that will be derived from existing Time Charter Equivalent (TCE) assessments, effective June 1.

The five implied calculated routes are: Vancouver, Canada to Pyeongtaek, South Korea on Panamax vessels; Vostochny, Russia to Paradip, east coast India on Panamax vessels; Puerto Bolivar, Colombia to Krishnapatnam, east coast India on Capesize vessels; Puerto Bolivar, Colombia to Pohang, South Korea on Capesize vessels; and Taman Coal Terminal, Russia to Paradip, east coast India on Supramax vessels.

Platts will also include Marine Fuel 0.5%S prices at the relevant bunkering ports, port charges, vessel speed and fuel consumption in the calculation of the implied freight rates from TCE assessments. Platts has surveyed market participants to arrive at values for these that reflect standard market practice.

The launch of implied calculated freight rates for these routes follows an observed increase in the volume of commodities shipped on these routes. Spot fixtures, however, remain limited as the majority of cargoes on these routes are moved on vessels taken on period or long-term charters.

All the implied calculated freight rates will be published in dollars per metric ton and will follow the Singapore publishing schedule.

The implied Vancouver, Canada to Pyeongtaek, South Korea freight rate basis 65,000 mt (plus/minus 10%) cargo size will be derived from the existing Vancouver, Canada, to Qingdao, China, Panamax TCE assessment (daily price database code: CDCAE00) that is published at the 5:30 pm (0930 GMT) Singapore close.

This follows increasing grain movements from Canadian Pacific Northwest to South Korea. In 2019, more than 3 million mt -- mainly corn and coal -- were shipped on this route, based on data from cflow.

The implied Vostochny, CIS Russian Far East to Paradip, east coast India freight rate basis 75,000 mt (plus/minus 10%) cargo size, will be derived from the Hay Point, Australia to Paradip, China, Panamax TCE assessment (daily price database code: MRYEB00) that is published at the 5:30 pm (0930 GMT) Singapore close.

The Commonwealth of Independent States (CIS), which exports coal from the Russian Far East, was observed to have shipped out over 3 million mt of coal to India, mainly on Panamax/Kamsarmax class ships, according to industry sources.

In Colombia, more coal shipments from Puerto Bolivar are swinging to India and South Korea, following a fall in its share of the European market. Coal cargoes moved on these two routes to India and South Korea are hauled on Capesize vessels. Coal market participants tracking Colombian and South African coal prices typically keep a close watch on Capesize freight rates for signs of the arbitrage window opening from Puerto Bolivar to South Asia and North Asia. In 2019, between 7 million mt and 8 million mt of Colombian coal arrived in Asia, according to Platts Analytics.

Platts will use its existing Tubarao, Brazil to Qingdao, China Capesize TCE assessment (daily price database code: MRYCB00) that is published at the 5:30 pm (0930 GMT) Singapore close, to derive implied freight rates for Puerto Bolivar, Colombia to Krishnapatnam, east coast India basis 150,000 mt (plus/minus 10%) cargo size, and the Puerto Bolivar, Colombia to Pohang, South Korea basis 150,000 mt (plus/minus 10%) cargo size.

The implied freight rate for Taman Coal Terminal, Russia to Paradip, east coast India basis 50,000 mt (plus/minus 10%) cargo size, will be derived from the Yuzhny, Ukraine to Cigading, Indonesia Supramax TCE assessment (daily price database code: GYUCB00). The Yuzhny, Ukraine to Cigading, Indonesia Supramax TCE assessment is published at the 4:30 pm (1630 GMT) London close. On days when London is away on a public holiday, the implied freight rate for the Taman Coal Terminal, Russia to Paradip, east coast India route will be calculated using the last assessed value at London close.

The Russian Black Sea port of Taman is fast growing into a major coal export center with its throughput expected to hit around 50 million mt by the end of 2020, according to industry estimates. Currently, this trade is most liquid on Supramax class ships with cargoes destined for India.

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