Crude Oil
Middle East
There was little movement in VLCC rates here, despite a pick up in activity especially towards the latter part of the week. However, there are some signs that we could be about to see an upturn, as a clear-out of early tonnage availability has encouraged Owners to show more resistance, especially on long East runs. Today, we are calling 270,000mt AG/China at ws 60 and 280,000mt AG/USG is now at ws 39 level.
The AG Suezmax list has tightened marginally this week, but rates remain steady in the region, with little to get excited about. TD23 remains steady at around 140,000mt x ws 65 via Cape. To head East, the market is around ws 110 and is relatively stable, with maybe a touch less there on a compromised unit.
Activity picked up this week on the Afras ex AG which has piled the pressure on Charterers. As a result, cargoes are now being worked further forward, with market cargoes struggling to cover off early second decade. Owners remain in the driving seat for now as prompt, well-approved tonnage becomes hard to find. The week ends with AG/East at 80,000mt x ws 175 with opportunity to push.
West Africa
There have been no VLCC fixtures reported this week from WAF, which indicates why this area has a softer feel with tonnage starting to build up. The market does need a fresh test to establish where exactly this zone is heading but on today’s market a Charterer would be under little pressure and rate for WAF/China should be around ws 61 level.
Suezmax markets in West Africa have been busier this week and Owners would have been expecting more, but an oversupply of tonnage has prevented things from picking up drastically. TD20 today we estimate at 130,000mt x ws 105.
Mediterranean
TD6 remains steady, with rates for CPC/Med hovering at around 135,000mt x ws 115. Rates to head East are steady and for the few runs that are still being done, we freight at around $5.3m for Libya/Ningbo via Cape.
As we have moved into the first decade fixing window for May, the Med Aframax market has seen a flurry of activity. Off the back of this, rates have continued to test northward as units were plucked from the front end of the list. This, combined with the US market heating up, caused sentiment to be given a boost. As a result, the week finished at ws 185 for a TD19 voyage. However, with fixing date progression by Monday, we could see some of the edges smoothed from this recent resurgence.
US Gulf/Latin America
The VLCC market here experienced a lower level of activity than the previous week, as Charterers moved cautiously to complete remaining May stems from the USG. The sentiment remains steady, but owners would need to see a step up in activity, if they are to have any chance of making gains with early June stems around the corner. The Brazil export market also has a steady feel about it, with last done levels being the norm. Today we expect a USG/China run will fix in the region of $8.6m, while we estimate a Brazil/China run is paying around ws 59 level.
North Sea
A bit of a damp squib this week, with little capturing the market’s attention. A quoted TC garnered some interest from Owners but that was really the only bit of excitement to tickle our fancy. Despite timid fixing, levels have remained pretty stable, kicking around the ws 140 level with things seeming unlikely to shift from this.
Clean Products
East
Full clear-out of the LR2s as the week ends. The list is super tight and the levels seen this week will almost certainly get pushed forward come Monday. Rates at present sit at $6.3m for UKC (via Cape) and TC1 at 75 x ws 215. However, with such a tight list and Owners well aware of just how tight it is, it will be interesting to see how big the push is next week.
The LR1s have ticked along quietly in the background. Not making a huge noise publicly but come the close of the week the list is very tight at the front and as a result, rates will undoubtedly see a positive correction. Both UKC and TC5 really need a fresh test, but for now assess TC5 at 55 x ws 240 levels and UKC at $5.0m (via Cape). Owners will take the weekend to stoke their boilers and get ready to go full steam ahead into the new week.
A week started full of expectations as we began with a tight position list and Owners with firm itineraries in the driving seat. Come mid-week TC17 rose to mid-300s and TC12 pushed ws 300 and cargoes up to 12th continued to surface. Despite another big jump on Thursday, sentiment suggests we’re not at the top yet, as the list into early May is tight and ballasters are limited in the first decade. As such, rates will push further. Expect to see some gamble on itineraries to lock in rates, while those Owners with firm positions will look to push.
North Asia started with a quiet beginning but followed up a super Wednesday, with more than 15 ships going on sub in one day. This, together with a short list of next window, sentiment changed overnight. Benchmark Korea/Australia rate went up ws 17.5 points to ws 300 and Korea/Spore up $125k to $940k on a replacement job. As pre-holiday fixing continues and fresh China export quota to be expected, the momentum will roll over to next week. The Singapore area still has been in the shortage of cargo but it is definitely supported by the spike in AG. As a result, TC7 gained ws 7.5 points to ws 295 and Owners’ mind is bullish.
Mediterranean
After we reached the heights of 30 x ws 335 for XMED last week we have seen rates come off due to a build up of prompt tonnage at the start of the week. Fresh lists pulled Monday showed a plethora of tonnage available and as a result XMED soon slipped to the 30 x ws 255 levels on Monday. Fast-forward to the present and we see rates bouncing around the 30 x ws 235-245 levels with final numbers very much date dependent after a clear out of end-month vessels. Heading into the weekend, a few cargoes remain left to cover with a steady finish expected.
The Med MR market has been very lackluster this week. We began with Med/TA trading at the 37 x ws 225 mark but since then we have seen little to no fresh cargoes and as a result, Med/Waf soon slipped to 37 x ws 220. This, combined with a soft TC2 market (37 x ws 165) should see Med/TA negatively correct when next tested with sub 37 x ws 200 potentially on the cards. Market quiet into the weekend.
UK Continent
With limited market cargoes throughout the week, Charterers in the MR UKC sector have managed to keep a strong grip on any aspirations and come Friday, we see rates chiseled down to 37 x ws 165 for TC2. Mondays pace was similar to the end of the previous week, with little for Owners to get their teeth into and with tonnage seemingly building for end/early dates, pressure started to build. Despite a good number of ships taken out quietly on Wednesday, this pressure continued and with some further poking and prodding of this market, we find ourselves slipping further with little support from the Handy market. We expect this sentiment to carry on into early next week until enquiry picks up.
It has been a week to forget for Handy Owners in the North with limited fixing opportunities on offer throughout. Diesel stocks remain well supplied in NWE which could be one of the main reasons why XUKC volumes have been subdued. XUKC closes at 30 x ws 220 but an injection of cargoes are required if Owners are to steady the ship at current levels.
Dirty Products
Handy
Activity in the North has been sluggish this week, where ws 235 repeats creating a steady feel to the region despite a tightening list. Furthermore, enquiry is surfacing and has been chipping away at available units, although this is happening a little too slowly, putting on hold on any ideas of firming. Available tonnage begins to open up towards the start of next month, perhaps keeping ws 235 as a conference level.
It’s a mixed bag in terms of activity in the Med, where the week started off in a typical fashion, with activity at healthy levels, clipping away units before a very busy Tuesday evening/Wednesday brought a flurry of activity, clearing units from what was beginning to look like a lengthy list. This then fizzled out, killing any further momentum. The list is left looking tighter though and both charterers and owners will be keen to see what levels of replenishment occur come Monday for forward guidance.
MR
MR Owners in the Continent have enjoyed the better of the two regions in terms of trading conditions, as 45kt enquiry has been present steadily clipping units from the list. Sentiment would suggest that levels should remain balanced now, as forward availability looks rather more evenly spread.
This week in the Med, however, full stem enquiry has been elusive. Owners have found employment via part cargoes in the meantime and have benefited from an overall tightening – helping to keep negative pressure at bay. Owners will hope for a return to full stem cargoes sooner rather than later, which is much needed in order to provide validation of correct market strength.
Panamax
Enquiry has picked up overall in this sector, leaving units thin on the ground until mid-May at the earliest. That said, this activity hadn’t caused the market to react, where confidence ultimately still lacks because of pressure from surrounding Aframaxes. In the US and surrounding markets, rates have picked up, which going forward could yet have an impact.
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Source : Gibson
