Crude Oil
Middle East
VLCC rates in the AG have remained on a steady path this week. The market on the surface has been relatively quiet with Charterers preferring to cover the second decade stems off market. The tonnage list is balanced for now, which does not provide much confidence of seeing an uptick in levels for the moment. Today we are calling 270,000mt AG/China at ws50 and a 280,000mt AG/USG run at the ws 33 level.
The AG list has been trimmed up and there is some hope for Owners, we estimate TD23 at 140,000mt x ws 67.5 via the Cape. To head East the market is steady but is still capped by the VLCCs at around ws 115 for East.
The East continued to soften on Aframaxes this week with the limited activity allowing the options available to Charterers to slowly grow. A rare AG/USG run was reportedly snapped up at $3.7m level via COGH, further cementing Charterers position in the driving seat. The week ends with AG/East at 80,000mt x ws 182.5 level with potential for rates to head further south next week, as the feeling of a summer market finally creeps in.
West Africa
WAF experienced another quiet week on the surface of it. Sentiment along with levels remain flat and there is little expectation that things will improve heading into next week. The tonnage list continues to be chipped away, however, so Owners may feel quietly confident that rates will soon rebound. On today’s market we estimate that the current rate for WAF/China should be around ws 55 level.
Suezmax markets in West Africa remain steady with some resistance from Owners, though there is some level of tightness on early dates. With a weaker USG market we will likely see more UKC discharge ships compete for TD20 today, we estimate this at 130,000mt x ws 117.5.
Mediterranean
TD6 is steady, with minimal enquiry in the region we haven’t really seen much movement. Rates are approximately 135,000mt x ws 122.5. Rates to head East remain steady at around a level $5.4m for Libya/Ningbo via the Cape.
It’s been an active week in the Med for Aframaxes where typically such volumes being traded would have caused some positive movement. However, with excess availability coming into the week Owners were grateful for stability being brought about and consequently last done was sought; during the week ws 145-150 levels were achieved for Ceyhan runs and low ws 160 levels for CPC voyages into the Med. On a positive note for owners, additional benefits were seen today looking at the lists and sentiment, it would appear that the foundations have been laid for possible upward movement across the second decade fixing program. As always, the cargo base will be key. However, many of the ships fixed this week won’t now be back in play again for the next 8-10 days, allowing for a potential hot spot of coverage if history repeats as it did this week with multiple stems across a narrow date range.
US Gulf/Latin America
The USG VLCC market has been rather stagnant this week, with all of the business taking place off the radar. While there have been some positive developments in terms of increased enquiry, levels continue to work below the $8m mark. The Brazil export market had a quiet week with only a couple of stems appearing. We expect a USG/China run will fix in the region of $7.75m while we estimate a Brazil/China run is paying around ws 54 level.
North Sea
For the first part of the week In the North Sea, fixing patterns have been largely consistent at conference levels, aided somewhat by ships leaving the area heading over to the US, and an active Med market having a knock on effect to sentiment up here. That said, overall volumes being traded have felt noticeably slower, and with Charterers sensing an opportunity to test levels favourably, at time of writing reports are now circulating a ws 140 has now gone on subs, showing a drop of some 20 ws points. Looking ahead whilst its unlikely further decline will be seen at such magnitude further decline maybe in store before the bottom is seen.
Clean Products
East
A week of behind-the-scenes activity has seen both lists have a decent clear out and are now looking tighter than that of two weeks ago! Albeit the LR2 have see a correction of rates, Owners will be content that activity levels are sustaining last done and as such with more activity next, should be able to progress forward. For now, TC1 is at 75,000mt x $5.85m. Again, we have seen the stubbornness of the LR1 owners come in to play this week, they have really held their line and with the activity seen will be buoyed for next week. TC5 at the 55,000mt x ws 235-240 mark and West (if you can find a ship willing to head that direction) at the $5.0m levels. Solid activity seen after a few weeks lacklustre shipping. Could be busy week as we head into July.
A slow start to the week was the last thing Owners in ballast or approaching their opening dates needed. The damage was done mid week where EAFR/SAFR took a big hit on an ex DD unit down to ws 305 for SAFR only which inevitably reflected on to other routes with earnings on that run now in the mid-low $30’s. TC12 followed suit with ws 235 on subs , perhaps 5-10 points more than was expected due to last cargo requirements and a continued resistance to heading East. West numbers now need a true retest. The recent lack of interest in Westbound voyages due to higher earnings in the AG may subside a little as the pressure on localised runs continues off the back of low volumes.
The North Asian MR market has been active throughout the week and rates have been supported at healthy level. Australia was last done between ws 330-340 subject to laycan and loading port and Korea/ Spore traded around $1m. Singapore opening units were ballasting North for Schina-Mchina loading due to sluggish local demand in the Strait and thick tonnage at the front. TC7 went on subs at ws 300 and next done is be expected to be lower. As the AG also under pressure, it would be a tough decision for any Singapore ships to ballast to the AG without a cargo
Mediterranean
After last week’s collapse, this week has been much more positive for Handy Owners in the Mediterranean. We began the week with Xmed trading at 30 x ws145 but a tighter list, combined with better enquiry midweek soon saw rates begin to improve. Off the back of this, we saw a big jump on Bsea/Med to the 30 x ws235 mark with Xmed now poised to follow suit. Where it next lands is yet to be seen, but Owners are bullish as we approach the weekend.
For MRs, levels have slowly improved off the back of a firming TC2 market. 37,000mt x ws 155 was the call Monday morning but momentum soon began to build thanks to an active TC2 market. Med/TA soon found itself at 37,000mt x ws 170 which remains last done at the time of writing. However with a handful of cargoes to cover before the weekend, TC2 is currently trading at 37,000mt x ws 182.5. Owners here in the Med are positive of closing the gap. Potential.
UK Continent
It has been a positive week for Handies in the North as we have seen a Healthy amount of enquiry which has contributed to a tighter position list. XUKC closes at 30,000mt x ws 180 but charterers have done a good job with some under the radar fixing, enabling them to keep a lid on rates. Potential heading into next week.
Its been a good week for MR Owners in NWE with a good number of deals done in the middle of the week, mostly due to the TA ARB working (hitting 4-month high). Unsurprisingly, most business has been done behind the scenes, limiting rate rises to 37,000mt x ws 182.5 for TC2. Plenty of tonnage has been cleared out pre-5th which leaves owners in a strong position especially if ships left on subs get fully fixed today. Currently there’s only a couple of MR cargoes marketed but those who do have tonnage in position could see further gains.
Dirty Products
Handy
This past week has brought a lacklustre feel across both the North and the Med, perhaps signalling the start of summer. In the North, activity almost ground to a halt with little to report. The week started with a new benchmark of ws 300, however as the days rolled by units began to bunch up. Although the week ended with a repetition of ws 300, this now feels like the top of the market and owners will be hoping for the return of enquiry to stop rates from falling.
The Med also saw a sluggish start to the week but in contrast to the North, the tonnage list already looked lengthy. As the days went by, more tonnage was added and enquiry remained muted. Levels fell to ws 240 on Friday and with multiple options still available as we move into next week, levels are expected to soften further.
MR
Not the week that owners would have been hoping for basis full stems in the North or the Med. Owners have found employment via part cargo as full stem enquiry remained elusive across. In the North, last done remains at ws 210 and the willingness from West Med ballasters to meet any demand on the Cont should help Charterers. For this reason, levels could well be tested in the Med.
Panamax
It’s been another quiet week for Panamaxes on the Cont and Med although a couple of more units look to open up into the first decade of the new month. As a result, should firm enquiry surface, charterers should be able to favourably test levels from the ws 140 benchmark.
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Source: Gibson
