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Platts to launch TCE index for LNG-fuelled Newcastlemaxes

Shipping analyst S&P Global Platts is to launch time charter equivalent (TCE) assessments for 209,000dwt Newcastlemax class dry bulk ships using LNG as bunker fuel on six key routes and a ton-mile weighted average index named NMAX GT4 on 3 February 2022.

The move recognises growing efforts by the shipping industry to embrace alternative fuels to reduce greenhouse gas (GHG) emissions.

According to a study commissioned by industry coalition SEA/LNG and the Society for Gas as a Marine Fuel (SGMF), using LNG as a marine fuel could help cut GHG emissions by 21% compared with oil-based marine fuels over the entire life cycle of a commodity cargo. The use of LNG curtails pollutants such as sulfur oxide (SOx), nitrogen oxide (NOx) and particulate matters.

Presently, there are 20 LNG-fuelled Newcastlemaxes on order, according to shipping industry executives, with several shipowners telling Platts they are considering the purchase of this class of vessel in future. Two LNG-powered Capesize vessels are currently in operation, while the first of the larger Newcastlemax class ships is expected to be commissioned during early 2022.

The new TCE assessments will reflect the $/day pricing derived from the respective voyage rates published on a $/mt basis in Platts Dry Freight Wire and will be calculated using LNG bunker fuel prices published by Platts. The port charges, vessel speed and fuel consumption used in the TCE calculations are arrived at by extensive market survey and reflect expected market standards.

The new TCE assessments cover routes from Port Headland, Saldanha Bay and Tubarao to Qingdao and from Puerto Bolivar and Hay Point to Rotterdam

The new NMAX GT4 Index assessment (daily code: NMGTA00, monthly average code: NMGTA03) will be derived by applying an allocated weighting to the daily TCE assessments of four key round voyages. Weighting for the individual TCE assessments is determined by the volume of Capesize and Newcastlemax vessel movements observed between the regions associated with the respective voyages over a 3-year period from Platts cFlow trade-flow analytics software, calculated in ton-miles. Ton-mile demand is calculated by multiplying the volume of cargo moved in metric tons by distance travelled in miles.

The TCE assessments and weightings that will be used to calculate the new NMAX GT4 Index would be based on flows observed over Jan. 1, 2017 to Dec. 31, 2019.

The new TCE assessments and NMAX GT4 Index will be assessed basis the Asia market close at 5:30 pm Singapore time (0930 GMT) and will follow the Singapore publishing schedule.


Image credit Deltamarin Caption Deltamarin designed LNG-fuelled Newcastlemax