Downgrades in Baltic coaster rates accelerate (21 Jul 2023)

The fall in spot freights has, by all signs, accelerated over the course of July with owners no longer able to depend on securing last-done levels save the very rarest of special agreements. The seasonal culprits of holiday-driven demand drift and a wider slowing in manufacturing operations that fuel that demand are both gaining force to combine into a bearish vortex that are putting charterers in the driver’s seat and owners on the sidelines. While week-on-week dis­counts have yet to exceed EUR 0.5/mt on any observed trade route, this is still an expanding aver­age differential when compared to the EUR 0.25/mt limit seen until just a few weeks ago. Westward-bound freights from the Baltic States to ARAG have fallen into the EUR 21-23/mt range after trading in the EUR 22-24/mt range at the end of June and as much as EUR 25-28/mt in the first quarter of the year.

Indeed, southbound freights from the upper Baltic into the ARAG were until recently still fetch­ing levels of over EUR 30/mt while the owners are now happy to take anything near EUR 25-26/mt for general cargoes and high EUR 20s/mt for non-fer­rous shipments of circa 5,000mt. Southbound rates from the German Baltic to the Spanish Med are still getting low EUR 40s to high EUR 30s/mt in most cases, but charterers are turning the screws here as well with EUR 40s/mt looking increasingly unlikely by the end of July. Short North Sea transits from WCUK to ARAG are unlikely to fetch anything over EUR 15/mt under ideal conditions are more likely to settle for EUR 13-14/mt rates based on generals of 4,000mt. Shipowners are hoping the markets will settle at a re-balanced lower level as soon as possible.

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