S&P Global Platts launches LNG-powered TCEs, Newcastlemax Weighted Index

SINGAPORE, February 10, 2022 /PRNewswire/ — S&P Global Platts (“Platts”), the leading independent provider of information, analysis and benchmark pricing to the commodity and energy markets, has released Time Charter Equivalent (TCE) ratings for 209,000 tdwt Newcastlemax bulk carriers Class introduced LNG as bunker fuel on six key routes and a tonne-kilometer weighted average index called NMAX GT4, effective February 3, 2022.

The introduction of these ratings comes as the shipping industry‘s growing drive to use alternative fuels to reduce greenhouse gas (GHG) emissions.

According to a study commissioned by the SEA-LNG industry coalition and the Gesellschaft für Gas als Schiffskraftstoff (SGMF), the use of LNG as marine fuel could help reduce greenhouse gas emissions by 21% over the entire life cycle of a cargo, compared to oil-based marine fuels . The use of LNG reduces pollutants such as sulfur oxides (SOx), nitrogen oxides (NOx) and particulate matter.

Peter NorfolkEditorial Director, Global Shipping & Freight, S&P Global Platts said: “The International Maritime Organization has set itself the goal of reducing total greenhouse gas emissions by 50% annually by 2050 compared to 2008 and CO2 emissions by 40% by 2030. New build orders for LNG-powered vessels are on the rise and LNG bunkering is rapidly expanding. Initiatives like The Sea Cargo Charter are urging owners to embrace decarbonization and sustainability. The market requires alternative fuel-based cargo ratings, so we are excited to introduce the world’s first LNG-fuelled dry bulk index and TCE ratings.”

NMAX GT4 is the premier alternative fuel based dry bulk market weighted average index, measuring global trade in Newcastlemax bulker vessels and reflecting a key segment of the global dry bulk market that is expected to evolve in the future. There are currently 20 LNG-powered Newcastlemax on order, according to shipping industry executives, and several shipowners are considering purchasing this class of LNG-powered bulk carriers for the future. Two LNG-powered Capesize vessels are currently in service, while the first of the larger Newcastlemax-class vessels is expected to enter service in early 2022. Currently 141 ports worldwide offer LNG bunkers.

The LNG fuel-based TCEs offer participants the option of either selecting a basket of routes across the index or individual TCEs. The NMAX GT4 at 3 February was rated $3,440/day and on February 4th at the $1,305/Day.

The new ratings expand Platts’ bulk market offering and complement previous launches of the Platts Capesize Weighted Average TCE Index (Cape T4), the Platts Kamsarmax Weighted Average TCE Index (KAMX 9) and the Platts Asia Pacific Supramax Weighted Average TCE Index (APSI 5) and Platts Asia Pacific Ultramax Weighted Average TCE Index (APUI 5).

About the NMAX GT4 index
Platt’s NMAX GT4 is based on an assigned weight for the daily Time Charter Equivalent (TCE) ratings of four key voyages. The weighting for each TCE rating is determined by the volume of Newcastlemax/Capesize ship movements observed between the regions associated with each crossing January 1, 2017to December 31, 2019, from Platt’s vessel tracking trade flow software cFlow. This ensures that the correct weighted average is applied to the index.

Platt’s cFlow is used to observe actual trade flow on Newcastlemax/Capesize vessels and calculate tonne-mile demand. Ton-mile demand is calculated by multiplying the volume of cargo moved in tons by the distance traveled in miles. Platt’s Newcastlemax TCE ratings ($/day) are derived from the equivalent charter prices for Capesize voyages ($/mt).

The routes were chosen based on extensive market exposures around the world, including shipowners, charterers and shipbrokers – and supported by the trade flow observed on Platts cFlow.

Trip weight (%)

Port Hedland, Western Australia – Qingdao, China

46%

Tubarao, Brazil – Qingdao, China

45%

Saldanha Bay, South Africa – Qingdao, China

6%

Puerto Bolivar, Colombia – Rotterdam, Netherlands

3%

For more details on the S&P Global Platts NMAX GT4 Index valuation methodology, see Subscriber notice.

Media contacts:
America: Kathleen Tanzy +1 917-331-4607, [email protected]

About S&P Global Platts
At S&P Global Platts, we provide the insights; You will make more informed trading and business decisions with confidence. We are the leading independent provider of information and benchmark prices for the commodity and energy markets. Clients in over 150 countries rely on our expertise in news, pricing and analysis to bring greater transparency and efficiency to the markets. S&P Global Platts coverage includes oil, gas, LNG, energy, petrochemicals, metals, agriculture and marine.

S&P Global Platts is a division of S&P Global (NYSE: SPGI) that provides individuals, businesses and governments with critical information so they can make confident decisions. For more information visit www.platts.com.

SOURCE S&P Global Platts

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