Baltic Dry Index plummeted

Baltic Dry Index (BDI) plummeted on 20 January 2020 as bunker price spreads hit capesize bulk carriers. Majority of capesize bulk carriers do not have scrubbers. Furthermore, capesize shipowners have been avoiding fixing long voyages. Baltic Dry Index (BDI) plummeted 729 points on 20 January 2020. Baltic Dry Index (BDI) 729 points is lowest point since late April 2019.

Due to tight capesize availability, Atlantic basin was trading at a slight premium to rates in the Pacific basin couple of weeks ago. On 20 January 2020, capesize spot rates plummeted again due to the bunker market. In bunker market, spread between very low-sulphur fuel oil (VLSFO) and intermediate fuel oil (IFO) remains high. Global average $662 per metric ton and $402 per metric ton respectively.

On 20 January 2020, weighted time-charter average for the Baltic Capesize Index’s (BCI) five major benchmark routes (5TC) was assessed at $7,760 per day. In Decem 2019, Baltic Capesize Index’s (BCI) five major benchmark routes (5TC) was assessed at $14,451 per day. Furthermore, abundant capesize tonnage in the Pacific basin appears to be building pressure on capesize rates. Shipowners have been trying to fix their vessels for short trips.

Just a small percentage of the world’s capesize fleet is fitted with scrubbers. Capesize sector exposed to bunker price volatility for very low-sulphur fuel oil (VLSFO). Curently, at international bunkering hubs, the spread between very low-sulphur fuel oil (VLSFO) and intermediate fuel oil (IFO) remains high. In capesize market, voyage rate weakening in the Pacific basin have been putting earnings firmly sub-opex (operating expenditure) levels.

Like capesize market, identical pattern have been appearing in the panamax market, but to a less dramatic extent. Trans-Atlantic panamax fixtures has been low and panamax spot rates rates plummeted on 20 January 2020 in the Atlantic basin as panamax tonnage slowly piled up. On 20 January 2020, weighted time-charter average for the Baltic Panamax Index’s (BPI) five major benchmark routes was assessed at $7,791 per day,

In Baltic Exchange Supramax Index (BSI), which was officially launched in 2006 and is currently based on a standard 58K DWT bulk carrier, market sentiment remains average. Currently, supramax spot rates in the Far East are exceptionally poor. On 20 January 2020, Baltic Exchange Supramax Index’s (BSI) weighted time-charter average to remain static at $6,156 per day.