The VLCC market experienced a positive week, with freight rates for Middle East Gulf (MEG) routes strengthening significantly. Improved demand led to a notable rate increase, with TC1 and TC20 routes showing significant gains, reports Baltic Exchange.
MR
The Middle East Gulf (MEG) MR market witnessed a surge in activity mid-week, driving up the TC17 37kt MEG/East Africa index by 9.14 points to WS205.
In the UK-Continent market, MR rates showed signs of improvement. The TC2 index (ARA/US-Atlantic coast) rebounded from its low point of WS104.38 to WS107.5. Similarly, the TC19 index (ARA/West Africa) also increased.
Conversely, MR rates in the US Gulf experienced a decline. The TC14 index (US-Gulf/UK-Continent) dropped significantly by 34.64 points to WS98.93, and the TC18 index (US-Gulf/Brazil) also fell from WS193.93 to WS161.07. The TC21 index for US-Gulf/Caribbean voyages declined by approximately 20%. As a result of these market movements, the MR Atlantic Triangulation Basket TCE experienced a substantial drop, falling from $21,547 to $14,998.
VLCC
Following a period of relative inactivity around the festive season, the dry bulk market has seen a renewed sense of urgency in the new year. While the increase in rates has been modest, there’s a noticeable uptick in activity as market participants strive to achieve their 2025 goals.
In the key Middle East Gulf to China route (TD3C), rates have increased by 3.5 points to WS47.05, translating to a daily round-trip TCE of $24,997.
Similarly, in the Atlantic market, rates for the West Africa to China (TD15) route have improved, rising to WS50.72. The US Gulf to China (TD22) route also witnessed a firming of rates, with a significant increase of $212,500.
These positive developments, while encouraging, need to be viewed within the broader context of the market. The overall market sentiment remains cautious, and sustained growth in rates will depend on a consistent improvement in demand and a continued reduction in vessel supply.
Suezmax
The Suezmaxes appear to be the uglier sisters, with rates falling on all the Baltic routes. The 130,000 mt Nigeria/UK Continent voyage (TD20) fell by almost 4 points to WS63.06, meaning a daily round-trip TCE of $19,250 while the TD27 route (Guyana to UK Continent basis 130,000mt) lost over 7.5 points to WS61.83 which translates into a daily round trip TCE of $18,056 basis discharge in Rotterdam. For the TD6 route of 135,000mt CPC/Med, the rate was reduced by 4 points to WS76.10 (showing a daily TCE of $17,968 round-trip). In the Middle East, the rate for the TD23 route of 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) had 5 points taken out of it , down to the WS80 level.
Aframax
In the North Sea, the rate for the 80,000mt Cross-UK Continent route (TD7) ended up 10 points down for the week at WS110 (giving a daily round-trip TCE of $21,550 basis Hound Point to Wilhelmshaven).
In the Mediterranean market the rate for 80,000mt Cross-Mediterranean (TD19) was on a downward spiral and collapsed 41.5 points to just slip under the WS100 mark (basis Ceyhan to Lavera, that shows a daily round trip TCE of $17,541).
Across the Atlantic, the market improved. Basis week-on-week values, the 70,000mt East Coast Mexico/US Gulf route (TD26) and the 70,000mt Covenas/US Gulf route (TD9) saw increases of 14.5 points and 12.5 points to reach the WS132.5-135 levels, which shows a daily round-trip TCE of $27,476 and $24,021 respectively. The rate for the trans-Atlantic route of 70,000mt US Gulf/UK Continent (TD25) has climbed up almost 12 points to WS129.72 (giving a round trip TCE basis Houston/Rotterdam of $27,965 per day), which may encourage some ballasters from Europe to ruin the party.
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Source: Baltic Exchange
