- VLCC Market Stays Sluggish Amid Low OPEC Production.
- Suezmax Rates Decline as West Africa Demand Stagnates.
- Aframax Rates Waver with Oversupply and Limited Inquiry.
The tanker market experienced a mixed week across vessel classes, with VLCC rates in the Arabian Gulf remaining stagnant amid low OPEC output, while optimism grew in the Atlantic Basin. Suezmax rates saw downward pressure as limited cargoes were released strategically, and Aframax struggled with oversupply before showing a modest recovery midweek. Meanwhile, the MR sector in the US Gulf outperformed expectations with substantial rate increases, hinting at a sustained uptrend as owner sentiment remains high, reports CR Weber.
VLCC
The VLCC market in AG is still slow, with TD3 rates remaining in the low ws50s. This is primarily due to OPEC’s capacity to lower the production level. Cargo availability has dropped low (based on 280,000 MT). However, some improvement in the Atlantic Basin has been witnessed due to an expected busier period, as December USG cargoes are ready. Though it would be a good picture, rates are stabilised at $7.8 million, still largely driven by the oversupply of tonnage.
Suezmax
Demand from West Africa was thin this week, with only a handful of cargoes around. Charterers were wise enough to release their second-decade November programs in an orchestrated manner to keep rates bilt early in the week suppressed. TD20 fell 2.5 points during the week, closing at ws95, and owner sentiment is conservative enough to influence the rate built for the next week.
In the Americas, Suezmax demand softened in the second half of the week, and a slight rate decline was influenced by an unbalanced tonnage supply and underwhelming Aframax returns. USG>UKCM rates fell to ws77.5 (basis 145,000 MT), while Guyana>UKCM remained unchanged at ws92.5 (basis 130,000 MT). USG>EAST rates were also steady, with Singapore bound at $4.95 million and long-haul Far East at $5.55 million, date-sensitive into next week. The Baltic Dirty Tanker Index (BDTI) TD20 closed at 94.00, down by 4.72 from last week’s close.
Aframax
The Aframax market opened slowly this week, supported by a very long tonnage list that brought some pressure downwards. USG>UKC rates began the week at ws162.5, which eased back to ws152.5 on Tuesday And only rallied to ws160 midweek following a brief recovery from four transatlantic cargoes. Due to low inquiry, it ended the week at ws160. ECMEX>USG was moderately active with rates easing from ws140 to ws145 (basis 70,000 MT).
MR (Medium Range Tankers)
The USG MR market rallied considerably this week, in contrast to the Continent, where rates eased as excess tonnage far outweighed available cargoes. Rates on the Continent started at 37,000 MT x ws90, slipping down to around ws85 by Friday. The USG improved considerably, with TC14 opening the week at 38,000 MT x ws135 and closing at around ws180. Rates also improved for TC18 going into Brazil from 38,000 MT x ws180 to ws230 for the week.
TC21 was another rocket, at $450,000 heading into the week but made its way up to close in the area of $775,000 on Friday, and high owner sentiment can only keep the momentum building unless some additional balusters from Europe arrive on this side.
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Source: CR Weber
