VLCC rates surged in August but face challenges ahead; Suezmax shows improvement with limited tonnage; Aframax rates stable, yet increased activity needed to tighten the market as September begins, reports fearnpulse.
VLCC
When the dust settled, August turned out to be a big month enabling rates to recover from the mid WS 40s in a matter of days, with WS 62.5 the highest paid for a MEG/Singapore run. MEG 1-10 September is far from done and owners will be trying to keep the momentum up. With Q4 around the corner, the shorter MEG/East runs are preferred over West Africa or Brazil, as owners want to keep short and are reluctant to lock in for longer voyages at the current levels (depending on the fleet size of course). As a result, West Africa, Brazil and the USG – heading East, are attracting a premium and it should be noted the tonnage situation in the West is also slim pickings.
Owners went into September riding on the wave of WS 60s. But the usual tactic of drip feeding cargoes often played by charterers has been prevalent so far this week and this will strain owners confidence. Our view next week – East softer, West warmer.
Suezmax
The beginning of the end? Is the so called ‘summer market’ soon to be behind us? It’s showing signs is the answer. Guyana cannot take VLCCs from September until April. This is going to add 10 or so more cargoes a month and it’s worth adding that the VLCC list in general in the West is not long. USG rates have already started to slowly rise and that will only assist. In the Mediterranean and West Africa there is still early tonnage but you can sense a bit of optimism from owners. MEG has been busier. For Basrah liftings the list is shorter so watch this space. The Suezmax market is showing signs of improvement.
Aframax
With the majority of August North Sea stems covered, activity has been limited as rates maintain at WS 120 level. So far this week we have seen around 10 vessels heading out of the area to benefit from busier markets in the USG and Mediterranean; unless North Sea market activity increases, we expect more to follow. One charterer has now reached into September dates and by the end of the week, with a UK holiday on Monday, a few more stems in September should be worked.
Last done levels look to have been repeated at least for the meantime as September dates begin to work. The lack of volume from Libya and the steady flow of ballasters from the North into the area has recently capped the market, and with supply of tonnage seemingly balanced for the 1st decade of September, it would take a surge of activity to tighten the list and move things on.
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Source: Fearnpulse
