- VLCC market shows mixed signals amid year-end rate negotiations and limited January fixing
- Suezmax rates firm as West Africa January volumes begin to clear amid tight tonnage
- Atlantic weather disruptions add uncertainty to vessel availability
- Aframax markets in North Sea and Mediterranean remain steady with December stems largely covered
According to the Fearnleys Weekly Report (Week 51), tanker markets are entering the final stretch of the year with mixed signals, as owners and charterers balance rate expectations against the desire to clear positions ahead of the Christmas holidays. Seasonal dynamics, weather disruptions, and forward cargo positioning are shaping market sentiment across VLCC, Suezmax, and Aframax segments.
VLCC: Market Caught Between Rates and Holidays
The VLCC market is currently struggling to find clear direction, reflected in the volatility of paper markets, with TD3C trading around WS 110 this morning compared to WS 123 for the balance of the month. Seasonal dynamics are once again in play, as owners weigh the push for rate improvements against the desire to clear positions ahead of the Christmas holidays.
Early January Middle East Gulf (MEG) stems have started to emerge and are expected to be adjusted, although actual fixing activity for January remains limited, aside from routine China Inc scheduling. Should some December cargoes spill over, the roughly 35 VLCCs currently free on the water may all be required, and potentially more.
Oil company and trader relets being circulated are seen largely as cosmetic, adding limited real momentum. In the Atlantic, activity continues to be driven by Brazil-related cargoes and relets, while Suezmax tonnage appears to dominate most other Atlantic opportunities, reinforcing its current competitive position.
Suezmax: Rates Firm as January Volumes Gain Traction
The Suezmax segment is showing firmer signs, with vessels quietly dropping off the list yesterday and additional cargoes entering the market today. This is beginning to absorb the January West Africa volume overhang that has been evident in recent days.
Fixtures at WS 135 for TD20, around two points above yesterday’s BDTI, suggest upward pressure on rates may continue. Many January barrels reportedly struggled to secure coverage last week, which helps explain their delayed movement despite earlier activity out of the US.
Adverse weather conditions in the Atlantic, along with disruptions in parts of the Mediterranean, are tightening supply and adding uncertainty. As a result, charterers may be forced either to pay for firm itineraries or adopt a wait-and-see approach, hoping owners with open tonnage will soften as the holiday shutdown approaches.
In the US Gulf, a small number of stems are still rumoured to be outstanding, reportedly attracting limited interest. However, given that US cargoes have been pushed unusually far forward, a pause in fixing could be strategic, allowing local tonnage to re-emerge.
Aframax: Steady Conditions Across Basins
North Sea
In the North Sea, natural dates are moving toward the end of the month, with a slimmer tonnage list due to quiet fixing activity and vessels ballasting. The market remains stable, and unless there is a significant increase in activity or weather-related disruption beyond current expectations, conditions into early 2025 are likely to remain balanced.
Mediterranean
In the Mediterranean, the final December stems are being covered at last-done levels. A handful of owners are still evaluating optimal fixing windows, which now extend into early January. With some relets also in circulation, rates are expected to repeat at current levels through the end of the week.
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Source: Fearnleys
