Baltic index inches up on increased capesize activity

Freight rates for Handysize tankers in the Baltic have surged to their highest levels in more than a year as ice builds around the key Russian export ports along the Gulf of Finland, creating restrictions on which vessels charterers can use.

The Baltic-UK Continent route, basis 30,000 mt, has risen to Worldscale 212.5, or $15.02/mt, up w47.5 in the past week after a bumpy start to the year. The last time rates were higher, on a dollar/mt basis, was January 6, 2017.

Plenty of cargoes are currently available for an ever shrinking list of available ice class tonnages in the natural window. Rates for ice class Medium Range tankers have also risen sharply.

“There are still cargoes out there loading in the Baltic, and the cold over there [in the Gulf of Finland] is looking like it’s going to stay, which means a need for ice class vessels and that should keep rates high for a while,” one broker said. The broker added, however, that the fact that many of the big charterers in the region, such as ST, Vitol and Trafigura, have their own ships, which means to a certain extent they can control the market.

On Monday, Neste was heard to have taken the Nord Highlander on subjects for a February 14 loading of a 30,000 mt cargo in Porvoo for a UKC discharge at w210. In addition, Vitol was heard to have taken two vessels on subs — the Seychelles Pioneer and the British Cumulus — for two 30,000 mt cargoes with loading in Primorsk and St Petersburg, discharging in the UK Continent, at w212.5.

Russian ports have imposed ice class restrictions since January 16.

According to a Russian shipping agent, vessels having ice class 1D are allowed to navigate in ice under icebreaker assistance only at Primorsk port, while vessels with ice class 1C or higher are allowed to navigate in ice by their own power provided they get permission from icebreakers.

Ust Luga port will only allow vessels with ice class 1D or higher to navigate in ice by own power from February 10.

Source: Platts

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