Tanker Market Shows Potential Rate Surge And Tight Tonnage

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Mfame Editor
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  • Predictable patterns in both Suezmax and Aframax markets.
  • Potential for rate adjustments based on upcoming June stems and market sentiment.

This week’s tanker market update highlights the key trends and developments across the VLCC, Suezmax, and Aframax segments. The VLCC market in the Middle East Gulf (MEG) experiences a lull as it transitions between May and June, with anticipation of potential upward pressure on rates. In the Atlantic, VLCC availability remains tight for prompt cargoes, yet mid-month openings present lucrative opportunities. The Suezmax market shows familiar fluctuations, while the Aframax segment exhibits sporadic activity with a firming trend driven by sentiment. Overall, market dynamics suggest a watchful eye on upcoming stems and rate adjustments, reports Fearnleys.

VLCC

This week marks the twilight zone between the May and June stems in the MEG. A few cargoes have reached out so far, but generally, the cargo list is quite—a steady feel, as we await the bulk of the 1-5 June window. The list will build in the meantime, but once the June stems come in, if there is any rush, we’ll have upward pressure. Tonnage is there to soak it up. MEG/China now sits in the low 70’s, however this time last month we were in the low 60’s, so May has signed off 10 points up.

The Atlantic as often is the case, the more interesting. Anything prompt (i.e. mid-month) in the USG is tight, but it does open up as ballasters will be attracted by USD 9.5m numbers USG/China. Almost too good to turn down.

Suezmax

The Suezmax market in the West is simply repeating a very familiar pattern whereby TD20 peaks at circa WS 110 and then falls back into the WS 90s, and that’s where we are today. US Gulf Aframaxes will ultimately determine when the inevitable bounce occurs.

There’s a predictable, steady feel in the East with adequate inquiry to maintain MEG/East at circa WS 110 and BOT/UKCM in the WS 60s.

Aframax

The available tonnage started the week looking relatively tight, but with VLCC and Suez depleting available Afra stems market activity has been sporadic leaving the market moving sideways. Dates pushing out into the 3rd decade with tonnage availability opening back up. The US market has softened but is still attractive for tonnage to ballast away.

Cargo volume has stayed consistent throughout the week picking off tonnage one by one. It’s tight off prompter dates but the replenishment vessels looking to come back into contention for early June will try to balance things out, with Suezmaxes working on the back of a sentiment driven by Aframaxes, rates look firm for now with still some stems left to cover in Libya and Ceyhan. Owners remain optimistic and bullish in their approach.

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Source: Fearnleys