VLCC, Suezmax, and Aframax markets remain under pressure, with muted year-end activity and low rates. Owners eye limited opportunities as charterers rush to cover stems before holidays, reports Fearnpulse.
VLCC
The VLCC market has remained sideways all week, with daily returns close to OPEX for the older guard, and it’s been hard for charterers to drive it down any further. Earnings at this time of a year are uncharacteristically low but here we are! Current returns on TD3C have forced owners will big fleets to explore further away in hope for a more active Western market, which has failed to deliver too. As a result, west tonnage list coupled with lack of activity resulted in rates being driven down to 6.5m for a USG/East voyage. As things stand, Saudi stem dates are expected within today/tomorrow and charterers are running against time to clear their desk before the holidays kick in next week. This leaves a window of 4-5 days to cover their requirements and clear subjects. We expect owners to push back now and take advantage of this situation to try and achieve low WS 40’s at least. And as we know, in a market things can turn quickly and suddenly we are in the mid WS 40’s. That’s the best it seems owners will get this year, and we start with a new slate in 2025.
Suezmax
Don’t call us Scrooge, but the week prior to Christmas normally heralds a buyer’s market, and this year is unlikely to be the exception. Whilst there has been positive market chatter relating potential upside in the US Gulf, we conclude that December is done (or close to) with zero pressure on early January dates.TD6 remains under downward pressure with WS 87.5 on subjects for a 13-15/January stem, leaving owners on a backward footing for now. West Africa has a slew of ships lining up to fix mid/high WS 80’s which suggests that a correction is likely on the cards, moderate as that may be. In the East, BOT/UKCM last traded WS 52.5 (Cape) with a steady feel.
Aframax
Rates in the North Sea look likely to remain in a sideways trend for the time being with the majority of volume for the rest of December being covered on relets and Suezmax. Tonnage has balanced out somewhat, but the potential for things to tighten as vessels continue to ballast to the US is still there, though it will take a certain increase in activity for pressure on rates to materialize in this market.
With December dates selling out owners in the Mediterranean have marginally pushed rates higher showing caution to keep a safe distance from larger vessels. Activity and USG ballasters has significantly thinned out tonnage, and further to this the number of ballasters from UKC to the US has been substantial of late, and as a result Continent positions have been fixed out of West Mediterranean. The fate of Aframax moving forward looks to be in the hands of Suezmax for one more time this year.
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Source: Fearnpulse
