Dry Freight Tces Explained

Dry Freight TCEs Explained

Overview Dry Freight Wire Platts Time Charter Equivalent (TCE) assessments reflect Platts Dry Freight Wire provides market participants with the net daily revenue of vessels operating on key dry bulk price assessments and analysis of the fundamentals routes across the globe. They are available in the Platts affecting freight prices. pricing database and in the Dry Freight Wire. – More than 250+ independent freight rate price assessments updated daily Primary features – Voyage ($/mt) and $/day (TCE) freight rates, latest – Daily assessments, expressed in $/day fixtures, cargoes, bids and offers – Dual TCEs: reflect scrubber and non-scrubber – All major vessel sizes, from Capesize to Handysize tonnage on same routes, reflecting the two-tier market post-IMO 2020 – Covering all major dry freight commodities: alumina, bauxite, coking and thermal coal, ferrous scrap, grains, – Fed by daily Platts bunker prices in representative iron ore, limestone, petcoke and sugar ports: HSFO, 0.5% marine fuels, MGO – Fully transparent formulas and assumptions, – Choice of format and delivery for easy integration into derived from extensive market survey back-office and analytical databases including via the Platts API or intuitive Excel Add-In – Produced by an independent, heavily regulated price reporting agency Benefits – Level the playing field, providing clear benchmarks – Keep up-to-date with market developments and spot for both physical and paper contracts opportunities ahead of the competition Calculation – Save time by gaining access to unique cargo information and verified fixtures Formula: TCE = net revenue / days of voyage – Understand price drivers and fluctuations to trade, write – Net Revenue = total revenue - total expenses contracts and negotiate transactions with confidence – Total Revenue = ($/mt freight rate x cargo quantity) - – Understand the tonnage situation and freight levels 5% commission – Leverage arbitrage opportunities to optimize – Total Cost = bunker costs + port costs profit margins Variables like load and discharge rates, a vessel’s speed and fuel consumption, and port costs are based on extensive market surveys and can be easily adjusted on feedback from industry participants. All changes would be communicated to the market in advance.

Platts TCE Calculation

$/mt freight Platts Variables: $/day TCE rate – Bunker consumption – Port costs (Revenue - costs)/days (scubber) – Speed – Delays Bunker prices – Cargo size – Sea Margin – Load/discharge rates – Canal Costs $/day TCE rate – Steaming distance (ECA & non-ECA) (non-scrubber) 1. 3.5% and MGO for scrubber TCEs 2. 0.5% and MGO for non-scrubber TCEs Dry Bulk TCEs

($/d) 40000

30000

20000

10000

-10000 Nov-19 Jan-20 Mar-20 May-20 Jul-20

Capesize: Port Hedland/Qingdao, Supramax: Yuzhny/Cigading, Kamsarmax: Santos/Qingdao, Kamsarmax: South Kalimantan/ 170kt iron ore 50kt grains 60kt grains Paradip, 75kt coal

Source: S&P Global Platts

CAPE T4 Index KMAX 9 Index The Platts CapeT4 Index is based on trade flow volume and Platts KMAX 9 is a weighted average index of the global trade captures the movement of widely consumed commodities, flow on Kamsarmax vessels. The KMAX 9 is derived by such as iron ore and coal, which ensures accurate applying an allocated weighting to the daily Time Charter representation of physical spot market trading activity. Equivalent (TCE) assessments of nine key voyages. Weighting It is calculated by applying an allocated weighting to the for the individual TCE assessments is determined by the daily TCE ($/day) assessments of four key Capesize round volume of Kamsarmax vessel movements observed between voyage routes: the regions associated with the respective voyages over the Route Voyage Symbol Weighting last three years from Platts’ trade flow software cFlow. Code (%) The weighting for the average TCE assessment is as follows, PPTCE5 N China Australia MRYAA00 46 based on flows observed over January 1, 2017 to Round Voyage December 31, 2019: PCTCE8 N China S Africa MRYBA00 6 Round Voyage Route Voyage Symbol Weighting Code (%) PCTCE3A N China Atlantic MRYCA00 45 Round Voyage PPTCE6eL S Kalimantan, Indonesia - CRYBB00 2.50 Paradip, India PPTCE7 Trans-Atlantic CRYAA00 3 Round Voyage PPTCE44L E Kalimantan, Indonesia - CRYBE00 6.50 Guangzhou PPTCE3eL Richards Bay, South Africa - CRYDB00 6.15 Primary features Paradip, India – Published at the 5:30 pm Singapore Market on Close PPTCE8L Hay Point, Australia - MRYEB00 7.45 Paradip, India – Weighted average is based on ton-mile demand PPTCE7L Hay Point, Australia - MRYFB00 11.25 – Ton-mile data collected from Platts cFlow Qingdao, China ship-tracking software PPTCE20L Vancouver, Canada - CDCAE00 10.75 – Robust and transparent methodology Qingdao, China – Reflects real supply-and-demand fundamentals PPTCE27L New Orleans, Louisiana - DNQBB00 8.75 Qingdao, China of the dry bulk market PPTCE26L Santos, Brazil - GSBQC00 34.25 Qingdao, China PPTCE10L Hampton Roads, Virginia - GCHRB00 12.40 Rotterdam, Netherlands Contact Us

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