VLCC
One could argue this week has been a bit of a fire sale. Looking at the Atlantic, owners consistently fixing below last done, despite plenty of volume. Lists don’t lie and due to a few weeks of quiet in the region, tonnage has built, leaving owners little choice but to aggressively compete. Rates for USG/Ningbo drifting from USD 9.5m last week to present rates at around the USD 8m level. One could argue there is also a desire for both owners and charterers to clear their desks before the Christmas period.
As for the Middle East liftings, we have seen rates drift from the mid-WS 60’s to current levels of 10 points less. Still, TCE’s remain very respectable across the board, so it’s all relative. At present, we sit in the gap between December and January (with a few charterers already dipping their toes into the new year) so owners will hope for an influx before the Christmas break, to at least arrest any further declines. But likely a little more pain before the tide turns.
Suezmax
The East Suezmax market remains remarkably resilient to quiet periods and almost none reactive to busier ones (relatively speaking). That possibly defines it as steady with most participants happy to go with the flow on both sides of the phone. MEG/East modern trades WS 115-120 and TD23 is maximum WS 65-67.5.
In the West, there doesn’t appear to be a solid support mechanism with a degree of softening likely to occur this side of the weekend. One could argue that with the USG/East arb’ being wide open, Suezmax’s will be dragged into the lightering fray, but we don’t feel this will be in sufficient volumes to significantly move the dial.
In isolation, West Africa (TD 20) doesn’t offer many positives. The list is lengthy and dates will shortly move into early January, with several ships on the cusp of missing the natural fixing window. Eni has just quoted Bonga/Mediterranean 28-29/12 and all will soon be revealed. Freighting this run mid/high WS 90’s.
Aframax
North
A very quiet week so far in the North Sea Aframax market. This is mainly due to the bigger sizes taking a fair share of the December volumes away and also too many available relets being programmed for their cargoes. Some cargoes are being worked under the radar or being worked on forward dates. Despite this coupled with some owners looking to ballast to the USG, we still need more activity to put upward pressure on rates.
Mediterranean
Despite some premium inclined vessels ballasting out of the Mediterranean, tonnage remains sufficient for the time being, as dates begin to move forward. Suezmax has absorbed a significant amount of Ceyhan bbls for December and as a result, Afra’s looking to seek out alternatives. Rates feel bottomy in the Mediterranean though with continued ballasters a burst in activity could turn the tide.
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Source: Fearn pulse
