Dirty freight market report: Back to neutral RBI valuations across regions and vessel classes

The Sparta RBI (relative basket index) compares the route in question against all material relevant global competing routes delivering crude grades into the same destination. It provides an under/overvalued signal and is an inverse leading indicator for freight demand and FFA price action.

· TD25 RBI is now only 74c/mt undervalued. Afra tonnage supply in the 14-day ahead window is in line with the trailing 90-day average of 15 vessels. Both valuation and vessel supply is hovering around neutral currently. Spot fixing looks steady at 145 WS. Aug TD25 rates at 124 WS look too cheap in comparison as we head into the 2nd decade of July. Expect the spot / Aug spread to narrow with Aug doing more of the work higher as spot TD25 and USGC grades are pricing in line with competition into NWE.

· TD20 is mildly undervalued at just –31c/mt. Spot and August rates have narrowed with the spread almost flat now. Suezmax tonnage supply in the 14-day ahead window is long at 4 vessels above the 90-day trailing average of 12 vessels. The price action with spot weakening and Aug strengthening looks to have played out and rates are poised to move sideways into next week.

Michael Ryan, our Freight Commodity Owner at Sparta, brings over a decade of experience with Trafigura in the energy sector managing risk across products and regions before becoming Head of Risk for subsidiary Puma Energy. Michael then joined the Trafigura commercial team trading freight while successfully growing the physical fleet through strategic dealmaking.

Sparta is a live, market intelligence and forecasting platform that enables oil traders, refiners, banks, hedge funds and wholesalers to have access to real-time and global actionable insights to capture market opportunities before others.

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