Platts to launch weighted average Ultramax dry bulk TCE indexes from Nov 1

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

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

These new indexes will represent an important part of the global dry bulk market that is otherwise not reflected in existing price benchmarks.

Platts first proposed the launch of these indexes in a subscriber note published Aug. 30: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/083021-platts-proposes-to-launch-weighted-average-ultramax-tce-indexes-nov-1

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 indexes will 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 launch, Platts will start publishing three new Ultramax TCE assessments from Nov. 1, 2021, which will be incorporated into these new indexes. Additionally, Platts will change the cargo volumes on two Asia Pacific Supramax thermal coal routes.

The APUI 5 and APUI 5S index assessments for a 63,000 dwt Ultramax class vessel will 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 will 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 cFlow trade-flow analytics software, 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 new APUI 5 and APUI 5S indices will be as follows, based on flows observed over Jan. 1, 2017 to Dec. 31, 2019:

Basis bunker fuel 0.5%:

*to be launched Nov. 1, 2021

Basis scrubber fitted:

* to be launched Nov. 1, 2021

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