Tanker markets see mixed gains; VLCCs climb near WS 60, Suezmax shows steady rates, and Aframax benefits from thinning tonnage and delays. Sentiment and strategic positioning remain critical drivers, reports Fearnpulse.
VLCC
Slow and steady wins the race. Rates continue to tick up, approaching the WS 60 mark MEG/East. This is normally when the smoke and mirror games begin. Charterers start hiding in the wings and become selective. Questions are being asked as to how much is left cargo wise for a given decade, is the position list widening etc. etc. – all in a ploy to rattle owners’ nerves, and in the last 3-4 months successfully so. However, looking back when the dust has settled there really is not much variation in volume month on month and barring a bit of logistics tonnage supply constant. And thus, sentiment trumps fundamentals. If not their own enemy, owners do have the key in hand; information is king, privacy is his queen, and self-destruction is his mistress. What may also tip the scale in owners favor now is more Atlantic volumes and WTI in contango, not seen for 10 months. This will entice more tonnage away from the MEG and add to the ton-mile equation.
Suezmax
The week commenced with a frisson of excitement from the US Gulf as Aframax/Suezmax crossover pushed US Gulf/TA rates to 145KT x WS 70 before correcting back down to WS 65. The net benefit to the wider Atlantic saw West Africa up-tick with an East run last pricing 130KT x WS 97.5. Given that the US Gulf market performed an immediate about turn (back to WS 65/TA), rates appear to have topped out for now.
The East appears to have been active on the surface with reports of circa 10 ships on subs, but there’s possibly been some smoke and mirrors with a number of these deal done last week and now seeping into the market. However, owners have to be commended for their role in disseminating this information instead of sitting on it (as is normally de-rigeur in this region). Throw into the mix a firmer VLCC market and we envisage no downside this week. We’re freighting an East run on modern at WS 97.5-102.5.
Aframax
A lot of early tonnage was cleared toward the back end of last week which has added some pressure and helped to nudge rates up slightly. Natural dates are pushing towards the end of November with 1st decade December dates waiting in the wings. Looking forward, with surrounding areas showing some signs of recovery, tonnage will again be thinned in the North region with vessels leaving the area to capitalize on better earnings.
Some steady activity and more positive sentiment mixed with delays has pushed rates to a new floor; further movement has been somewhat limited by Suezmax. Ceyhan is quietly being covered toward back end of 1st decade as the early December N.Africa stems also enter the fray. CPC facing pressure with increased delays in the Straits and available tonnage dependent on itineraries. Tonnage looks balanced with enough candidates for the time being.
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Source: Fearnpulse
