Dry Bulk Freight Rate Forecast

Optimize operational, financial and freight strategies through an analytics-driven forecast

S&P Global Freight Rate Forecast provides clients with an analytics-driven and unbiased view of the freight market, helping clients to find clarity in a volatile environment. Built in agreement with the Baltic Exchange, our model uses over 3,000 drivers from across S&P Global, utilizing our unique breadth and depth of knowledge to draw links between macroeconomic factors and the freight rates. With the use of machine learning and advanced analytics, the forecast is able to provide an unbiased market view that enables clients to unravel the complexities of the shipping market with ease. Our forecast provides weekly and monthly freight rate updates for up to three years, providing clients with the analytical rationale they need to make timely and efficient decisions.

The Freight Rate Forecast offers a valuable solution that helps you:

Capitalize on arbitrage opportunities by identifying trade signals
Gain valuable insights on the capesize, panamax and supramax market dynamics
Make smarter decisions based on an analytical rationale
Optimize operational efficiency with data–driven insights
Understand market conditions to mitigate risk to price exposure
Gain a granular understanding of market behavior and trends

Gain valuable insight into market trends

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Key Features:

Access to a web-based interface with dynamic dashboards displaying models’ results
- In-depth exploratory data analysis of main drivers per route/model, including model parameters
- Weekly Freight Insights highlighting relevant market events and trends
- Comprehensive monthly reports with in-depth analysis of future freight rate
Ad hoc analysis on industry related matters (ex: COVID-19 impact, Trade war, IMO2020)
Global monthly economic reports containing critical intelligence on key economies
Access to Dry Bulk Trade Flows & Forecast (+50 commodities)
Dedicated analyst team for continual qualitative support

S&P Global Freight Rate Forecast July 20 Update

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Methodology

S&P Global uses the most advanced modelling and statistical techniques to train its models in understanding historical relationships between industry related drivers (>3,000) and Baltic’s indices.

Using various combinations of drivers and modelling techniques, a number of forecast models are built to simulate freight dynamics under different market conditions.

These models results are assessed to ensure consistency of model parameters and out of sample accuracy (target >80%). Finally, the best performing modelling frameworks are selected and updated on a monthly basis.

The table below provides an overview of some key drivers used for the Freight Rate Modelling. The drivers contain data and trends from over 40 countries and approximately 50 commodities prices and spreads.

Demand Drivers

GDP
Fixed Investment
Industrial Production
Production Price Index
Consumer Price Index
Retail Prices
Bond Yields
Interest Rates
Exchange Rates
Commodities Prices & Spreads
Trade Volume of various commodities
Freight Price & Spread

Demand Drivers

Ship Availability per region (AIS)
Speed and Congestion Factor (AIS)
Slow Steaming Ratio (AIS)
Bunker Price of various regions
Fleet Capacity (start/end year)
Delivery
Deletion
Fleet Growth

See how the Freight Rate Forecast could help you:

The Freight Rate Forecast provides valuable data-driven insights to help organizations gain tighter control of all areas of their business.

Enhance Trading Strategy (FFA)

Benchmark S&P Global Freight Rate Forecast against Forward Freight Agreement (FFA) curve to identify trade signals and arbitrage opportunities
Mitigate price exposure in an increasing volatile market
Assess financial impacts ahead of market shifts

Optimize Operational and Commercial Strategy

Gain insight into short and long term market trends and shifts
Assess optimum portfolio and fleet mix: Understand what vessel types and routes/basins hold future profitability
Improve contractual and pricing strategy: Evaluate accurate time to enter or exit a contract, define contract length (Spot vs Period) and best pricing strategy (Fixed vs Index linked)

Improve risk management

Identify the risks arising from unexpected changes in freight rates
Simulate risk exposure under different market scenarios
Estimate future earnings of vessels to support financial decision
Assess risks of covenant breaches and repayment defaults

Utilize Analytics - Driven Information to Support Decision Making on Freight Market

Benchmark conventional in-house freight analysis against our data-driven model to help:

Research and consulting functions
- Evaluate alternative freight scenarios
- Understand influential macro drivers not covered within internal research
- Provide valuable insights on freight market dynamics backed by drivers exploratory data analysis

Financial and investment areas:
- Make decision related to budget process and revenue prevision
- Cash flow, return of investment and risk management
- Asset acquisition

Partnership

About The Baltic Exchange - The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative shipping contracts. The company has an international community of over 600 member firms, which encompasses the majority of world shipping interests, and commits to a code of business conduct encapsulated in the motto ‘Our Word, Our Bond’. Baltic Exchange information is used by shipbrokers, owners & operators, traders, financiers and charterers as a reliable and independent view of the dry and tanker markets.

Visit the Baltic Exchange Website.

Experts

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Rahul Kapoor

Rahul leads an integrated commodity analytics product management, data science and research team. As a business head, he is responsible for driving new product growth for our analytics products Commodities at Sea and Freight Analytics. A subject matter expert in the maritime industry and financial markets, Rahul is a thought leader with proven credentials in market analysis forecasting, shipping economics and commodity market developments. He is a regular speaker at major conferences and client events globally, and is frequently interviewed by both print and visual media. Most recently, he was at Bloomberg Intelligence and earlier headed Drewry Financial Research Services Ltd. He has also worked as senior equities analyst at RS Platou Markets and Nomura.Rahul holds a Bachelor of Science in Marine Engineering from BITS, Pilani and a Postgraduate in Management from IMI, New Delhi, India.

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Pranay Shukla

Pranay is a Director of Research & Analysis within the Fuels, Chemicals, and Resource Solutions department at S&P Global Commodity Insights. His primary focus is on dry bulk commodities and shipping, and he is responsible for coordinating the analysis of global dry bulk commodities markets. This includes developing global and regional supply and demand balances, short- to medium-term forecasts, cost projections, and asset ownership league tables. Pranay also provides scenario analysis and supports Multiclient Studies to his team.Prior to joining S&P Global Commodity Insights, Pranay worked as a senior trading analyst covering dry bulk commodities and freight at Mercuria Energy Trading. He also analyzed global LNG and LPG markets at Drewry Shipping Consultants.Pranay has a Postgraduate Management degree in Finance and is a member of the Institute of Chartered Shipbrokers, Singapore branch. Additionally, he is a Fellow of the Narottam Morarjee Institute of Shipping.

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Fotios Katsoulas

Fotios focuses on the oil tanker freight markets, seaborne trade flows of crude oil and clean petroleum products and their impacts on the shipping cycles and investors' decisions, drawing from his experience in commercial shipping and energy sectors.Previously, he gained experience in using the latest technology to provide insights to the shipping industry and to associated finance and insurance providers. As head of research for Affinity Shipping and as shipping analyst for Maritime Strategies International, he managed big shipping data, developed shipping cycle econometric models, and assisted with advisory projects and valuations for major international shipping banks and financial providers. Fotios regularly attends international shipping industry conferences and has professional experience in operational research and corporate presentations. Sectors covered include oil tankers, gas carriers, and offshore sectors.Fotios holds a Master of Science in shipping, trade, and finance from Bayes (former Cass) Business School, City University of London, United Kingdom, an LLB from Queen Mary University of London and a BSc in Business Administration from Athens University of Economics and Business.

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Dry Bulk Freight Rate Forecast

Optimize operational, financial and freight strategies through an analytics-driven forecast

Key Features:

S&P Global Freight Rate Forecast July 20 Update

Methodology

Demand Drivers

Demand Drivers

See how the Freight Rate Forecast could help you:

Partnership

Experts

Rahul Kapoor

Pranay Shukla

Fotios Katsoulas