Platts proposes to launch weighted average Ultramax TCE indexes Nov 1

S&P Global Platts is proposing to launch two daily weighted average Ultramax time charter equivalent (TCE) indexes reflecting Asia-Pacific trade, comprising ton-mile rates of five key TCE assessments, from Nov. 1, 2021.

The proposed APUI 5 index would be a demand-weighted average of five key TCE assessments basis 0.5% sulfur bunker fuel, while the proposed APUI 5S index would be an average of the same demand-weighted TCE assessments basis scrubber-fitted ships.

These new indices would reflect an important part of the global dry bulk market that is otherwise not reflected in existing price benchmarks. Ultramax vessels in the Asia Pacific typically remain within the region and the associated flows depend significantly on triangulation, which helps to minimize ballast time as well as boost tonnage utilization and earnings.

The new indices would reflect the movement of wide-ranging commodities such as coal, nickel ore, limestone, dolomite, gypsum, aggregates, fertilizers, met-coke, bauxite, spodumene, iron ore, bauxite, manganese, grains and sugar.

Alongside this proposed launch, Platts is separately proposing to start publishing three new Ultramax TCE assessments from Nov. 1, 2021, which would be incorporated into these new indices. Additionally, Platts is also proposing to change the cargo volumes on two Asia-Pacific Supramax markets.

The proposed APUI 5 and APUI 5S index assessments for a 63,000 dwt Ultramax class vessel would be derived by applying an allocated weighting to the daily Ultramax TCE assessments of five key round voyages published at 5:30 pm Singapore close (0930 GMT). The index assessments would follow the Platts Singapore publishing schedule.

Weighting for the individual TCE assessments is determined by the volume of Supramax and Ultramax vessel movements observed between the regions associated with the respective voyages over a three-year period from Platts trade flow software cFlow, calculated in ton-miles. Ultramax and Supramax vessels typically compete for similar sized stems as both vessel classes reflect geared and grabbed ships.

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 proposed new APUI 5 and APUI 5S indices would be as follows, based on flows observed over Jan. 1, 2017 to Dec. 31, 2019:

Basis bunker fuel 0.5%:

*proposed to be launched Nov 1, 2021

Basis scrubber fitted:

*proposed to be launched Nov 1, 2021

Please send all comments or questions by Sept. 17, 2021 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 to the public upon request.