Fearnleys Weekly Report – Week 43

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Tankers

VLCC

VLCC rates took a hit this week but only in relative terms, as it is difficult to call making upwards to USD 100k/day weakening. Rates on Monday in the WS 105-110 window before KPC set the tone with a WS 100 fixture, followed by NSRP doing WS 98 for Vietnam, both on modern vessels. Valid reasons for the owner to consider sub WS 100 however, with a short ballast from India, 9 other vessels in the trade, a named voyage 1:1 and most importantly an attractive TCE. This puts an MEG/China run close to the WS 100 mark – which side of that mark depends on where you sit. Current active cargoes aiming double digits, but worth noting near 60 MEG deals and the 2nd decade yet to fly, plenty to come.

The Atlantic a little quieter. A few USG cargoes wdwf but deals Brazil/East up to WS 107.5, albeit prompt dates. It’s a tricky market to call.

Suezmax

Within the space of just eight months, the New Atlantic Market has evolved into a beast, creating new trading patterns that apply stresses to the tonnage list that have seldom, if ever, been witnessed before. Each sub-region/load zone starts out devouring its own natural tonnage before turning its attention to ballasters (same algorithm every time). With this in mind, the market continues on a firm footing with West Africa and the Black Sea competing for the same ships with TD20 and TD6 likely to finish off the week at circa WS 190’s and WS 210’s respectively. The fixing window for both regions is focused on second decade November. The East is quiet but don’t get lulled into thinking that it has down side, because unless charterers stump up WS 180’s for a MEG/East run, owners will simply ballast to the Atlantic.

Aframax

The Nsea market moved more or less sideways in the last week with earning around USD 55k pd. We do see more owners, who earlier was only concentrating on Russian cargoes, now also looking at loading non-Russian North Sea grades. How this will affect rates remain to be seen. However, we expect the market to remain at current levels as the supply and demand scenario looks fairly balanced at the time of writing. Med/BSea market slowly but steadily moved up to higher levels last week. Returns on a cross-Med run right now are even better than voyages ex CPC with owners trying to earn a tad more on each fixture. 1st decade of November might be a bit slower later this week, but overall, we expect rates to remain strong as supply of vessels is very balanced due to surrounding areas offering good opportunities as well.

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Source: FearnPulse

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