S&P Global Platts will launch time charter equivalent (TCE) assessments for Ultramax class dry bulk ships on three routes — Australia to Vietnam, Indonesia to China and Persian Gulf to India — effective 1 November 2021, to reflect growing thermal coal exports from Australia and Indonesia and increasing limestone shipments from the Persian Gulf on the respective routes.
These TCE assessments reflect the gross daily revenue of Ultramax vessels operating on these routes. They will be published in US dollars/day and will be derived from the respective Supramax voyage rates published by Platts on a $/mt basis.
Platts first proposed the launch of these TCE assessments in a subscriber note published Aug. 30.
Ultramax and Supramax vessels typically compete for similar sized stems as both vessel classes reflect geared and grabbed ships, and Platts understands there is increasing interest to utilise Ultramax vessels, compared with Supramax vessels in the dry bulk freight market, given the larger cargo carrying capacity and lower fuel consumption.
By the end of 2021, Platts Analytics expects 1,177 Ultramax vessels to be on the water as compared to just 444 vessels in 2015. A further 96 Ultramax vessels are currently in the order book to be delivered over the next three years. By comparison, there are currently 2,088 Supramax vessels on the water, with only 28 more of these in the order book to be delivered in the next three years, according to Platts Analytics.
The proposed TCE assessments will be calculated using bunker prices published by Platts.
Platts will publish two sets of TCEs for each route: one for scrubber-fitted vessels reflecting the use of 3.5% sulphur marine bunker fuel, and one for non-scrubber fitted vessels reflecting the use of 0.5% sulphur marine bunker fuel. The port charges, vessel speed, and bunker fuel consumption used in the TCE calculations are arrived at by extensive market survey and reflect market practice.
In addition to the new routes, Platts will amend the cargo sizes reflected on its Supramax thermal coal freight assessments for East Kalimantan, Indonesia to Guangzhou, China, and Richards Bay, South Africa to Port Qasim, Pakistan to 55,000mt (plus/minus 10%), from 50,000mt (plus/minus 10%) currently. Again the changes become effective on 1 November this year.
The change is to more accurately reflect the typical thermal coal cargo volumes shipped on these routes. Ultramax and Supramax vessels typically compete for similar sized stems as both vessel classes reflect geared and grabbed ships, and Platts understands that Ultramaxes have become the preferred tonnage given their increased availability in the spot market, higher cargo carrying capacity and better fuel economics.
Almost two-thirds of Supramax/Ultramax thermal coal spot fixtures from South Africa to Pakistan observed by Platts from January 2020 to July 2021 were basis 55,000mt (plus/minus 10%). In addition, more than 50% of thermal coal exported from South Africa to Pakistan over the same period has been on Ultramax class bulkers, based on data from Platts cFlow trade-flow analytics software.
On the thermal coal route from Indonesia to China, spot fixtures concluded basis 55,000mt (plus/minus 10%) have almost quadrupled during the first half of 2021, compared with the same