Successfull trial of Baltic Exchange

SUCCESSFUL TRIAL OF BALTIC EXCHANGE TIME-CHARTER EQUIVALENT ASSESSMENTS

Following a successful three month trial, the Baltic Exchange today (1 May) officially launches its daily Time-Charter Equivalent (TCE) assessments for dirty tankers. The service provides average dollar pricing conversions for Very Large Crude Carriers (VLCCs), Suezmax and Aframax tankers derived from a range of routes already reported on by the Baltic Exchange and expressed in Worldscale.

According to Baltic Exchange Chief Executive Jeremy Penn, this new service ?will create new trading opportunities by focusing on the daily value in the market of different vessel types.?

Barry Bednar, Chairman of the Baltic"s Tanker Freight Market Information Group, welcomed the move. ?Financial markets are not accustomed to using the complex Worldscale system. Having independent benchmark dollar rates provided by the Baltic Exchange is a very welcome step which will help boost liquidity in the tanker FFA market.?

The TCE is calculated using a variable feed of bunker prices supplied by Argus Media. Variable exchange rates supplied under licence by XE.com are also used for adjusting port costs. Port charges used in this calculation are provided under licence by Inchcape Shipping Services.

The vessel descriptions and approach to the calculation are as follow:

VLCC

300,000 mt dwt, double hull. 155,000 scnt.
14.5 knots on 80 ballast mt IFO /100 mt laden

In port:

2 days loading 20 mt per day
2 days discharging 85 mt per day
1.5 days waiting/anchor 10mt per day

Routes:

The published VLCC time-charter equivalent is an average of the rates derived from TD1 and TD3.

TD1: 280000 mt Ras Tanura/LOOP laydays canceling 20/30 days in advance max age 20 years.

The calculation is based on current market practice of ballasting the vessel back via the Suez Canal and Suez Canal rebate to apply. Bunkers based on Fujairah. Weather margin 5%. 2.5% total commission.

TD3: 260000 mt Ras Tanura/Chiba laydays canceling 30/40 days in advance max age 15 years.

The calculation includes a weather margin of 5% and bunkers based on Fujairah. 2.5% total commission

Suezmax

160,000 mt dwt, double hull.
14.5 knots on 50 ballast mt IFO / 60 mt laden

In port:
2 days loading 12 mt per day
2 days discharging 50 mt per day
1 day's waiting/anchor 10mt per day

Routes:

The published Suezmax time-charter equivalent is an average of the rates derived from TD5 and TD6

TD5: 130,000mt, West Africa to USAC. Off Shore Bonny to Philadelphia with laydays/cancelling 15/25 days in advance. Maximum age 20 years.

The calculation includes a weather margin of 5% and bunkers based on Philadelphia. 2.5% total commission.

TD6: 260000 135,000mt, Black Sea/Mediterranean. Novorossiyk to Augusta with laydays/cancelling 10/15 days in advance. Maximum age 20 years.

The calculation includes a weather margin of 5% and bunkers based on Augusta. 2.5% total commission.

Aframax

105,000 mt dwt, double hull.
14.5 knots on 48 ballast mt IFO / 54 mt laden

In port:
2 days loading 10 mt per day
2 days discharging 42.5 mt per day
0.5 day waiting/anchor 5mt per day

Routes:

The published Aframax time-charter equivalent is an average of the rates derived from TD7, TD8, TD9, TD11, TD14 and TD17.

TD7: 80,000mt, North Sea to Continent. Sullom Voe to Wilhelmshaven, with laydays/cancelling 7/14 days in advance. Maximum age 20 years.

The calculation includes a weather margin of 5% and bunkers based on Wilhelmshaven. 2.5% total commission.

TD8: 80,000mt, Crude and/or DPP Heat 135F, Kuwait to Singapore. Mena al Ahmadi/Singapore with laydays/cancelling 20/25 days in advance. Double hull vessel, Maximum age 20 years.

The calculation includes a weather margin of 5% and bunkers based on Fujairah. 2.5% total commission. In addition it will include heating to maintain 135F for 11.65 days of passage time and 1.5 day discharging ? 20mt per day.

TD9: 70,000mt, Caribbean to US Gulf. Puerto La Cruz (Jose Platform TAECJ - Jan 2004) to Corpus Christi with laydays/cancelling 7/14 days in advance. Maximum age 20 years. Assessment basis - Oil Pollution Act premium paid.

The calculation includes a weather margin of 5% and bunkers based on Aruba. 2.5% total commission.

TD11: 80,000mt, cross Mediterranean/Banias to Lavera with laydays/cancelling 10/15 days in advance. Maximum age 20 years.

The calculation includes a weather margin of 5% and bunkers based on Lavera 2.5% total commission.

TD14: 80000 mt, no heat crude, SE Asia to EC Australia, Seria to Sydney with laydays/cancelling 21/25 days in advance. Double hull and max 15 years old.

The calculation includes a weather margin of 5% and bunkers based on Singapore. 2.5% total commission.

TD17: 100,000 mt, crude, Baltic to UK-Cont, Primorsk to Wilhelmshaven (Great Belt laden / ballast) with laydays/cancelling 10/20 days in advance. Double hull and max 15 years

The calculation includes a weather margin of 5% and bunkers based on Wilhelmshaven. 2.5% total commission.

The Baltic Exchange is also conducting trial assessments for product tankers:

MR product tanker

40/ 47000 mt dwt, double hull. 27500 grt.
14.5 on 30 ballast mt IFO / 36 mt laden

In port:
2 days loading 5 mt per day
2 days discharging 12 mt per day
1 days waiting/anchor 5mt per day

Routes:

The published time-charter equivalents will be an average of the rates derived from TC2_37, TC3_38 & TC10.

TC2_37: 37,000mt, CPP/UNL Continent to USAC. Rotterdam to New York with laydays/cancelling 10/14 days in advance. Maximum age 15 years.

The calculation includes a weather margin of 5% and bunkers based on Rotterdam. 3.75% total commission.

TC3_38: 38,000mt, CPP/UNL Caribbean to USAC. Aruba to New York with laydays/cancelling 6/10 days in advance. Maximum age 20 years. Assessment basis - Oil Pollution Act premium paid.

The calculation includes a weather margin of 5% and bunkers based on Aruba. 3.75% total commission.

TC10: TRIAL - 40,000 mt, CPP/UNL South Korea to NOPAC West Coast. S. Korea to Vancouver BC ? Rosarito range with laydays/cancelling 14-21 days in advance. Maximum age 15 years, double hull, oil major approved.

The calculation includes a weather margin of 5% and bunkers based on Long Beach. 3.75% total commission.

For the purpose of this calculation the load port used is Yosu and the discharge port is Los Angeles.

Source: The Baltic Exchange

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