Dry Freight TCEs Explained

Overview Dry Freight Wire

Platts Time Charter Equivalent (TCE) assessments reflect
the net daily revenue of vessels operating on key dry bulk
routes across the globe. They are available in the Platts
pricing database and in the Dry Freight Wire.
Primary features
– Daily assessments, expressed in $/day
– Dual TCEs: reflect scrubber and non-scrubber
tonnage on same routes, reflecting the two-tier
market post-IMO 2020
– Fed by daily Platts bunker prices in representative
ports: HSFO, 0.5% marine fuels, MGO
– Fully transparent formulas and assumptions,
derived from extensive market survey
– Produced by an independent, heavily regulated price
reporting agency
– Level the playing field, providing clear benchmarks
for both physical and paper contracts
Platts Dry Freight Wire provides market participants with
price assessments and analysis of the fundamentals
affecting freight prices.
– More than 250+ independent freight rate price
assessments updated daily
– Voyage ($/mt) and $/day (TCE) freight rates, latest
fixtures, cargoes, bids and offers
– All major vessel sizes, from Capesize to Handysize
– Covering all major dry freight commodities: alumina,
bauxite, coking and thermal coal, ferrous scrap, grains,
iron ore, limestone, petcoke and sugar
– Choice of format and delivery for easy integration into
back-office and analytical databases including via the
Platts API or intuitive Excel Add-In
Benefits
– Keep up-to-date with market developments and spot
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 (scubber)
– Delays (Revenue - costs)/days
– Speed
– Cargo size – Sea Margin
Bunker prices – Canal Costs
– Load/discharge rates $/day TCE rate
– Steaming distance
(ECA & non-ECA) (non-scrubber)
1. 3.5% and MGO for scrubber TCEs
2. 0.5% and MGO for non-scrubber TCEs
Dry Bulk TCEs
($/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
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