VLCC
The Arab Gulf sector moved into the slower lull period this week, with April stems nearing
completion and May cargoes only starting to appear. As per the norm over this period, inquires slowed; however, world-scale rates saw a slight uptick due in part to rising bunker prices and in part to surging activity in the Atlantic Basin.
TD3C increased over 4 points through the week with today’s assessment ending ws35.38, yielding a TCE of about $3,200 per day. In the Atlantic Basin, an influx of inquires, mid-week onward put firm upward pressure on rates. While not all cargoes were certain to materialize, the surge of activity, both in the USG and the North Sea, gave owners ample choices and buoyed their rate expectations. While upward pressure is still evident at week’s end, questions of sustainability have arisen as reports of tender business mean multiple units could fail and get added back to the available supply. For now, the market is at a standoff until the picture becomes clearer.
SUEZMAX
West Africa inquiry was rather lackluster this week resulting in a quick dip in rates for the
TD20 routes off the back of disjointed tonnage fundamentals and diminishing sentiment amongst owners. The TD20 route was tested accordingly as rates slipped 5 points on the week-to-week comparison down to ws55. As a result, TD20 TCE levels slipped south for the 2nd week in a row yielding a sub-OPEX return of roughly ~$6,200/day (IFO 380) / ~$3,000/day (0.5%). In the Americas, limited demand along with sufficient tonnage avails left rates vulnerable for downward testing by charterers. Rates for USG – TA voyages stumbled all the way down to ws37.5 levels basis 145k MT cargo size which by no coincidence coincides with the equivalent Aframax levels for the same voyage.
With TA rates slipping below the ws40 barrier for the first time since early January, corresponding TCE returns pushed even closer to slipping into “RED” for the always popular route amongst owners. The USG-SPORE route is pegged at around $2.75-2.8m levels and remains date-sensitive. Overall, tonnage fundamentals in the Atlantic basin appear to be shifting back towards being more balanced, however, for rates to move off current levels will require an early injection of cargo inquiry to kick off the week. BDTI – TD20
ended the week settling at 55.91 which is down (-3.09) from this time last week.
AFRAMAX
Lingering prompt tonnage kept the market flat for most of the week. However, after some
steady demand, owners started showing some resistance and ultimately drove rates up 10 world-scale points on both Transatlantic and local routes, despite prompt tonnage still lingering by the end of the week. That said, with prompt options remaining, rates will likely hover near last done levels for now, and with more ships expected to open over the weekend, expect next week to start off in a similar fashion. Over in Europe, markets continued to ease this week. The lack of cargoes allowed for longer lists which gave charterers plenty of opportunities to continue their downward push. Cross UKC rates
closed at ws82.5 which was down from ws95 at the start of the week. Cross Mediterranean routes bottomed out by the close of the week at ws77.5 and left owners earning negative returns on most of the trade lanes. In fact, some owners may start to hold out until the markets recover which should happen toward the end of the month once the May CPC program begins. And, if the rumors are true, it should be busier than normal for this time of year on the Cross Mediterranean routes.
MR
A decent amount of activity in both the Continent and the Mediterranean markets as the week progressed saw rates bottom at ws125 (basis 37,000mt cargo) and slowly inch up during the week to close the week at ws135 (basis 37,000mt cargo) for TC2 voyages. A weak US Gulf market will likely force most US Atlantic Coast, Brazil, and perhaps Caribbean-based ships to ballast to Europe which will likely keep rates in check next week. The lack of activity in the US Gulf this week allowed charterers to chisel down the rates and force owners to give back the gains they achieved last week.
Rates closed for the week for the USG>UKC-MED route at around ws72.5 (basis 38,000mt cargo) and around ws115 for the USG>Brazil route (basis 38,000mt cargo). USG>ECMEX and USG>CBS closed at $195,000 and $375,000, respectively, while USG>Chile ended the week at $1,175,000.
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