Shipping Market Weekly Update: Posidonia Preparations and Market Shifts

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As the shipping industry prepares for a busy week at the Posidonia conference, ship owners are strategically positioning their fleets to minimize distractions. This has resulted in significant market corrections and shifts across various regions and vessel types.

Middle East Gulf
– LR2 Market: The LR2 AG/West rate has dropped to $6.8M, while Naphtha rates hold steady at 75,000mt x ws 250.
– LR1 Market: Westbound rates are on subs at $4.85M (ex Kuwait), with TC5 holding at ws 270. These rates are expected to be tested soon.

Far East and Pacific
– MR Market: It was a busy week for Far Eastern MRs. The Korea/Spore route increased by $100k to around $950k. Short haul rates improved significantly, with cross-Straits rates reaching $500-$530k, up $60-$90k from last week.
– Typhoon Season: Disruptions are expected in North Asia over the next 2-3 months due to the start of the typhoon season.

Mediterranean
– Handy Market: Rates firmed early in the week but are now on the brink of dropping. XMed started at 30,000mt x ws 235, peaked at 30,000mt x ws 285, and is now under pressure as the list opens up.
– MR Market: Rates for Med/TA jumped to 37,000mt x ws 235 at the start of the week and have since remained steady due to consistent inquiry and a balanced list.

UK Continent
Handy Market Rates have been steady around 30,000mt x ws 222.5-225. The MR market saw a jump, reducing competition for short-haul 30kt clips.MR Market Rates surged midweek to 37,000mt x ws 207.5 for TC2 but calmed to around ws 200 by the end of the week. WAF stems held a 20/25 point premium.

VLCC and Suezmax
VLCC Market Rates in the AG are dropping due to insufficient cargo inquiries. A 270,000mt AG/China run is now at ws 57, and 280,000mt AG/USG at ws 36. The AG market firmed dramatically, with Basrah rates pushing TD23 above 140,000mt x ws 90. Eastbound rates are capped by VLCCs at around ws 130.

Aframax
AG Market Rates continued to inch up, with AG/East at 80,000mt x ws 207.5 and India fixtures at 80,000mt x ws 225. The list shows signs of replenishment for the end of the second decade.VLCC Market Activity is muted, with rates for WAF/China estimated around ws 61. Suezmax Market Rates for TD20 are firm at 130,000mt x ws 117.5 due to tight prompt dates. Aframax Market Rates dropped slightly from ws 250 to mid ws 230s. Further corrections are expected with Posidonia disruptions and Trieste maintenance ending.

US Gulf/Latin America
– VLCC Market: Rates are declining, with a USG/China run estimated at around $8.8M and Brazil/China at ws 59.
– Panamax Market: The USG/Caribs region is seeing idle units stack up, applying negative pressure to rates.

North Sea
Handy Market Rates are around ws 147.5-150. With Posidonia starting, a slow start is expected for next week. Handys and MRs. Rates are expected to firm slightly in the North and Med. The slow start to Posidonia may see fewer fixtures and a gradual rate increase. Panamaxes Limited movement and stable rates are expected due to thin workable units. Clean and Dirty Tanker Spot Rates Varied movements in WS and TCE rates, reflecting overall market trends. Rotterdam, Fujairah, and Singapore VLSFO prices saw slight increases, while Rotterdam LSMGO remained stable.

The shipping market experienced significant shifts this week as preparations for Posidonia affected market dynamics. Rates varied across regions and vessel types, with strategic positioning by owners impacting overall market sentiment.

 

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Source: Gibson