Bulk Shipments  

• The Capesize index had a positive impact on the BDI over the last few weeks, helping to lift it back above 1500pts by the end of November
• More positive sentiment in the Panamax and Supramax sectors may help push spot levels higher in the run up to the holiday season, however there is sure to be a degree of caution in there when pricing anything further forward as recent history suggests that the dry bulk market can have a difficult time of it once we get into the new year.
• The High-Low Fuel Oil spread has widened out to around $290pmt with demand for the IMO-2020 compliant fuel increasing as we get closer to implementation day. This widening spread currently translates into a Low Sulphur premium of $7pmt on a 50kmt shipment of bulk raw sugar from Brazil to China over the cost of a scrubber fitted vessel which can still burn the cheaper high sulphur fuel whilst remaining IMO-2020 compliant. However, the gasoil alternative gives somewhat of a ceiling to this premium.

Containerised Shipments  

• Most carriers introduced surcharges with effect from December 1^st in an effort to start recouping the costs incurred to comply with the new IMO 2020 regulations coming into effect January 1^st, 2020. This has led to sharp increases in rates across most trade lanes, particular for those rate agreements with validities up to three months.
• With each line taking a different approach to the calculation and terminology being used, shippers have been left having to re-visit their contracted rates leading to concern and confusion across the industry.
• The lack of historical data for low sulphur fuel prices has made it especially difficult to obtain complete transparency and standardisation in the approaches being taken. It is expected that the low sulphur fuel premium will over time fall to a premium of 35-40% of the current higher sulphur standard.