VLCC
Little change this week in the Arabian Gulf VLCC sector as TD3C continued to hover in the mid to high ws30’s. Limited inquiries were met with sufficient tonnage. We did see high volume of under the radar inquiries pick off ships and we also anticipate the October stem confirmations to start appearing next week. In the Atlantic Basin, following a very quiet couple of weeks, activity roared back this week with an influx of activity in the Atlantic VLCC sector.
SUEZMAX
A very active end to the week for the sector in West Africa with several charterers entering the market on top of one another boosting sentiment amongst owners going into the weekend. Tonnage fundamentals appear to be shifting in a more balanced state as increased demand coupled with a more active VLCC market has assisted in pushing rates up to ws77.5 levels for TD20 after teetering in the low ws70’s for much of the past 2 weeks. In the Americas, Suezmax inquiries remained quiet on the surface as rates continued their downward correction off the back of a descending Aframax sector and ample tonnage availability for early October dates. Rates for USG>UKCM slipped down below the ws50 barrier to ws48.5 levels (basis 145,000mt cargo) while USG>EAST trade is currently pegged at $4.5m for Singapore discharge and Long East at $5.0m but remains untested and date sensitive. Expect to see more resistance amongst owners from ballasting their UKC and WMED positions across the Atlantic as the TCE differential between TD20 vs. the USG>UKCM trade continues to widen. BDTI- TD20 ended the week settling at ws77.05, which is up 4.78 points from this time last week.
AFRAMAX
The oversupply of prompt tonnage choked the market for yet another week despite an uptick in activity on Thursday and Friday. Routes into Europe fixed at the ws95-100 range this week while routes out of EC Mexico dropped down to ws90. TCEs remained dismal again this week with earnings out of EC Mexico bottoming out near $1,400 per day while routes of Europe were under $10,000 per day by the end of the week. However, despite another week of suppressed rates, there was a bit of optimism around the increase in activity, which owners hope can extend into next week and give them an opportunity to push for more. The markets in Europe were no different with Cross UKC routes fetching ws95 after only one cargo was worked for the week while Cross Mediterranean continued its soft sentiment, trading near ws82.5 by Friday. Unless activity can pick up in the region, expect a similar situation to kick things off next week.
MR
TC2 did a solid job of “holding the line” this week. Despite a fresh batch of balusters fleeing a weakened US market, rates were able to maintain ws180 levels (basis 37,000mt cargo). A stronger Med market helped offset some of the limited inquiries at times on the UKC keeping freight levels steady. However, increased ballasting tonnage could provide further options for charterers placing downward pressure on the next natural fixing windows. A few cheaper deals concluded last Friday set up weaker sentiment for the US Gulf starting on Monday. Multiple offers for USG>ECMEX cargoes brought rates down to $450,000 from a previously done $600,000, and ultimately slid down to $300,000. This sent some panic through owners competing for longer haul voyages causing rates to drop daily. TC14 slipped from ws125-130 all the way to ws85 (basis 38,000mt) before bottoming. USG>Brazil suffered a similar fate as rates dropped from ws200 to ws170-175 by the end of the week. USG>Chile was reset at $2.15m and USG>CBS is still hovering around $500,000-$525,000 levels. A few multi-option cargoes being talked about could help provide a bit of a boost, but unfortunately excessive tonnage still appears to be the overwhelming factor before we can see any significant improvement.
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