Freight Monthly Report - Hellenic Shipping News Worldwide · 2017-02-01 · SGX Freight Monthly...
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SGX Freight Monthly Report January 2017 SGX freight derivative volumes totaled 30,591 contracts in January (-5% m/m; -34% y/y), while open interest averaged 88,539 contracts during the month (-3% m/m; +3% y/y). The Baltic Dry Index declined 17% during January, its second consecutive month of declines, though Panamax rates notably bucked the trend rising on stronger grains trade. Despite the seasonal declines across other vessel classes, rates largely exceeded the more bearish expectations for the month. As the dry freight market looks to beyond Lunar New Year for direction, seaborne coal trade remains a key area of uncertainty for 2017. Our latest industry survey indicated expectations that Chinese coal output restrictions will likely be enforced again from the spring, casting a cloud of uncertainty over seaborne demand in the months ahead. Market Overview 1 February 2017 Freight volumes in January totaled 30,591 contracts (-5% m/m; -34% y/y), while open interest averaged 88,539 contracts (-3% m/m; +3% y/y). SGX Freight Derivatives Freight Derivative Volumes by Contract Type Freight Derivative Open Interest by Contract Type *SGX freight swaps & futures are fully fungible and include full margin offset. Details on margin requirements are included at the back of this report Source: SGX 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 no. of contracts Options Futures & FFAs 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 no. of contracts Options Futures & FFAs
Transcript of Freight Monthly Report - Hellenic Shipping News Worldwide · 2017-02-01 · SGX Freight Monthly...
SGX Freight Monthly Report January 2017
SGX freight derivative volumes totaled 30,591 contracts in January (-5% m/m; -34% y/y), while open interest averaged 88,539 contracts during the month (-3% m/m; +3% y/y). The Baltic Dry Index declined 17% during January, its second consecutive month of declines, though Panamax rates notably bucked the trend rising on stronger grains trade. Despite the seasonal declines across other vessel classes, rates largely exceeded the more bearish expectations for the month. As the dry freight market looks to beyond Lunar New Year for direction, seaborne coal trade remains a key area of uncertainty for 2017. Our latest industry survey indicated expectations that Chinese coal output restrictions will likely be enforced again from the spring, casting a cloud of uncertainty over seaborne demand in the months ahead.
Market Overview
1 February 2017
Freight volumes in January totaled 30,591 contracts (-5% m/m; -34% y/y), while open interest averaged 88,539 contracts (-3% m/m; +3% y/y).
SGX Freight Derivatives
Freight Derivative Volumes by Contract Type Freight Derivative Open Interest by Contract Type
*SGX freight swaps & futures are fully fungible and include full margin offset. Details on margin requirements are included at the back of this report Source: SGX
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
no. of contracts
Options
Futures & FFAs
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
no. of contracts
OptionsFutures & FFAs
2
BDI sees seasonal pull-back in January; grains boost Panamax rates The Baltic Dry Index (BDI) ended the month down 17% in January, though remained more than double that of Jan 2016. Panamax rates bucked the trend of dry freight winter blues, increasing 12% during January on stronger grains trade. Capesize rates declined 16% during the month, while among smaller vessel classes Supramax and Handysize rates declined 25% and 33%, respectively. In spite of the general decline in most spot rates during January, rates largely exceeded more bearish expectations for the month, most notably in the Capesize and Panamax market. The spot Cape/Panamax ratio closed January at 1.23x, versus 1.63x a month ago (LTM avg.: 1.44x).
Source: Baltic Exchange, Bloomberg, SGX Source: Baltic Exchange, Bloomberg, SGX
Source: Baltic Exchange, SGX Source: Baltic Exchange, SGX
Freight Forward Curves Capesize-Panamax Ratio
Baltic Freight Indices Freight Rate Volatility
Source: SGX
Freight Derivative Volumes by Product Freight Derivative Open Interest by Product
0
500
1000
1500
2000
2500
3000
Capesize Panamax Supramax Handysize
0%
50%
100%
150%
200%
Capesize Panamax Supramax Handysize
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
Cape/Panamax Ratio Upper Limit Lower Limit
Feb
-17
Jun
-17
Oct
-17
Feb
-18
Jun
-18
Oct
-18
Feb
-19
Jun
-19
Oct
-19
Feb
-20
Jun
-20
Oct
-20
Feb
-21
Jun
-21
Oct
-21
Feb
-22
Jun
-22
Oct
-22
Capesize (5TC)PanamaxSupramaxHandysize
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
no. of contracts C5 3A 2A
HV SV PVCV/CW
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
no. of contracts C5 3A 2A
HV SV PVCV/CW
3
Coal to remain key uncertainty for dry freight in 2017 Stronger-than-expected seaborne coal trade, following implementation of domestic output restrictions in China, was one of the main surprises in the dry freight commodity suite last year. Looking forward, that same dark cloud of uncertainty is likely to linger over 2017. Our latest industry survey revealed widespread expectations that China’s 276-day production restrictions will likely be resumed from the spring, with uncertainty over the impact on import demand as central policymakers adjust production and prices to their desired levels. Meanwhile, Indian import demand is also likely to hinge on domestic production. Across key dry bulk commodities, iron ore stockpiles at Chinese ports continued to trend higher to a record high of around 120Mt, while iron ore prices defied bearish expectations and remained around the $80 per tonne range for second consecutive month. Thermal coal inventory at Chinese ports on the other hand declined through the course of January. Seaborne thermal coal prices pulled back moderately, though NEWC prices remained comfortably above $80 per tonne.
Source: Bloomberg, Steelhome, SGX Source: Bloomberg, Steelhome, SGX
Source: Bloomberg, Australian Bureau of Statistics, Ministerio do Desenvolvimento
Source: Bloomberg, Australian Bureau of Statistics, Indonesian Badan Pusat Statistik
Australian & Brazilian Iron Ore Exports Indonesian & Australian Coal Exports
Chinese Iron Ore Inventory at Ports Chinese Thermal Coal Stocks at Ports
70
75
80
85
90
95
100
105
110
115
120
million tonnes
-
5
10
15
20
25
30
35
million tonnes
0
10
20
30
40
50
60
70
80
million tonnes
Australia Brazil
10
15
20
25
30
35
40
million tonnes
Indonesia Australia
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Margin Requirements (as of 1 February 2017)
*Margin offsets are available for opposite swap/futures positions in the same underlying commodity ** SGX margin schedules are revised regularly. Latest schedules can be found on our website here Source: SGX
SGX Freight Top 5 Inter-Dealer Brokers – Q4 2016
*Brokers listed in alphabetical order
IDB
Clarksons Platou Futures
Freight Investor Services Ltd
GFI Group Pte Ltd
ICAP
SSY Futures Ltd
Contract Name Currency
Contract
month
(From)
Contract
month
(To)
Maint.
Margin
Initial
Margin
Time Charters
Capesize Time Charter Basket USD Feb-17 Mar-17 2,500 2,750
Capesize Time Charter Basket USD Apr-17 Jun-17 2,000 2,200
Capesize Time Charter Basket USD Jul-17 Sep-17 1,300 1,430
Capesize Time Charter Basket USD Oct-17 Dec-17 1,300 1,430
Capesize Time Charter Basket USD Jan-18 Dec-99 2,700 2,970
Panamax Time Charter Basket USD Feb-17 Mar-17 1,200 1,320
Panamax Time Charter Basket USD Apr-17 Jun-17 900 990
Panamax Time Charter Basket USD Jul-17 Sep-17 700 770
Panamax Time Charter Basket USD Oct-17 Dec-17 650 715
Panamax Time Charter Basket USD Jan-18 Dec-99 1,000 1,100
Supramax Time Charter Basket USD Feb-17 Mar-17 800 880
Supramax Time Charter Basket USD Apr-17 Jun-17 750 825
Supramax Time Charter Basket USD Jul-17 Sep-17 600 660
Supramax Time Charter Basket USD Oct-17 Dec-99 750 825
Handysize Time Charter Basket USD Feb-17 Mar-17 500 550
Handysize Time Charter Basket USD Apr-17 Jun-17 400 440
Handysize Time Charter Basket USD Jul-17 Sep-17 310 341
Handysize Time Charter Basket USD Oct-17 Dec-99 350 385
Oct-16 Dec-16 400 440 Specific Routes
Panamax Route 2A USD Feb-17 Dec-99 1,300 1,430
Panamax Route 3A USD Feb-17 Dec-99 700 770
Capesize Route C5 - West Australia/ Qingdao USD Feb-17 Mar-17 400 440
Capesize Route C5 - West Australia/ Qingdao USD Apr-17 Jun-17 500 550
Capesize Route C5 - West Australia/ Qingdao USD Jul-17 Sep-17 600 660
Capesize Route C5 - West Australia/ Qingdao USD Oct-17 Dec-99 600 660
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Cross-Product Margin Offsets (as of 1 February 2017)
*Margin offsets are available for opposite swap/futures positions in the same underlying commodity ** SGX margin schedules are revised regularly. Latest schedules can be found on our website here Source: SGX
Products Margin Offset
Freight
Capes ize time charter - 4TC Capes ize time charter - 5TC 75%
Panamax route P2A Panamax route P3A 65%
Panamax route P2A Supramax time charter 60%
Panamax route P3A Supramax time charter 60%
Panamax time charter Supramax time charter 60%
Panamax route P3A Panamax time charter 60%
Panamax time charter Handymax time charter 55%
Capes ize route C5 Supramax time charter 55%
Panamax route P3A Handymax time charter 55%
Panamax route P2A Panamax time charter 55%
Capes ize time charter - 5TC Panamax time charter 55%
Panamax route P3A Capes ize route C5 50%
Capes ize route C5 Panamax time charter 50%
Capes ize route C5 Capes ize time charter - 5TC 48%
Panamax route P2A Capes ize route C5 45%
Panamax route P2A Handymax time charter 45%
Supramax time charter Handymax time charter 45%
Capes ize time charter - 5TC Supramax time charter 42%
Capes ize route C5 Handymax time charter 40%
Capes ize time charter - 5TC Handymax time charter 40%
Capes ize route C5 Capes ize time charter - 4TC 35%
Panamax route P3A Capes ize time charter - 4TC 30%
Panamax route P3A Capes ize time charter - 5TC 25%
Panamax route P2A Capes ize time charter - 4TC 25%
Panamax route P2A Capes ize time charter - 5TC 25%
Capes ize time charter - 4TC Supramax time charter 5%
Panamax time charter Capes ize time charter - 4TC 5%
Iron Ore
Panamax time charter Iron Ore 58% Fe 45%
Capes ize time charter - 4TC Iron Ore 58% Fe 45%
Capes ize time charter - 4TC Iron Ore 62% Fe 45%
Capes ize time charter - 5TC Iron Ore 62% Fe 40%
Capes ize time charter - 5TC Iron Ore 58% Fe 40%
Panamax time charter Iron Ore 62% Fe 40%
Capes ize route C5 Iron Ore 62% Fe 35%
Capes ize route C5 Iron Ore 58% Fe 30%
Coking Coal
Panamax time charter Coking Coal - FOB Austra l ia 40%
Panamax time charter Coking Coal - CFR China 40%
Capes ize time charter - 4TC Coking Coal - FOB Austra l ia 30%
Capes ize time charter - 5TC Coking Coal - FOB Austra l ia 30%
Capes ize time charter - 4TC Coking Coal - CFR China 20%
Capes ize time charter - 5TC Coking Coal - CFR China 20%
Thermal Coal
Panamax time charter Thermal Coal - API4 & API5 45%
Panamax time charter Thermal Coal - Indo Sub-bit 40%
Capes ize time charter - 4TC Thermal Coal - API4 & API5 35%
Capes ize time charter - 5TC Thermal Coal - API4 & API5 35%
Capes ize time charter - 5TC Thermal Coal - Indo Sub-bit 20%
Capes ize time charter - 4TC Thermal Coal - Indo Sub-bit 20%
Steel
Panamax time charter HRC Steel 45%
Capes ize time charter - 4TC HRC Steel 35%
Capes ize time charter - 5TC HRC Steel 35%
Fuel Oil
Panamax route P3A Fuel Oi l 180cst & 380cst 55%
Supramax time charter Fuel Oi l 180cst 55%
Handymax time charter Fuel Oi l 180cst 50%
Capes ize route C5 Fuel Oi l 180cst 50%
Panamax time charter Fuel Oi l 180cst 50%
Handymax time charter Fuel Oi l 380cst 45%
Panamax route P2A Fuel Oi l 380cst 45%
Panamax route P2A Fuel Oi l 180cst 40%
Capes ize route C5 Fuel Oi l 380cst 40%
Capes ize time charter - 4TC Fuel Oi l 180cst 40%
Capes ize time charter - 5TC Fuel Oi l 180cst 40%
Capes ize time charter - 4TC Fuel Oi l 380cst 40%
Capes ize time charter - 5TC Fuel Oi l 380cst 40%
Supramax time charter Fuel Oi l 380cst 40%
Panamax time charter Fuel Oi l 380cst 35%
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