VLCC
From an owner’s perspective, the less said about the past week the better, with rates drifting into the lower WS 40’s for a TD3 run, which on a TCE basis leaves a Baltic vessel teetering around the USD 20k TCE. Others will be dipping firmly into the teens. This, despite healthy activity for end July/early August dates which had failed to light up the market. BUT, and it is a big but, there seems to be some green shoots of a gentle recovery. A number of early August stems looking to Korea and some Chinese enquiry at least giving the owners some choice. The drawback remains that a long list with plenty of overhang and the prevalence of relets interspersed within said list will weigh heavy.
Bit brighter in the MEG then, but the Atlantic, reporting a few failings with ships handed back to owners in a dropping market is never a good sign. Possible fewer ballasters will head to the Cape due to the lower numbers will help down the line, but in the short term, little demand for oil in the Atlantic basin will mean lower numbers. Roll on the Autumn.
Suezmax
Whilst the Atlantic market continues to deliver bumper Summer returns (relatively speaking), you could be forgiven for asking, what are the fundamentals that are keeping this market so high? The answer is sentiment, because when you count ship/cargo ratios, the supply/demand argument doesn’t stack up. We’re now fixing August dates with TD20 at close to the WS 100 mark, so ostensibly, there hasn’t been a Summer market and when compared to the same time last year, it’s up nearly 30 percent.
The East is another market that has weathered this quiet period extremely well. Despite VLCCs eating into the 1MB market share, you won’t find a Suezmax owner today willing less that circa WS 102.5-107.5 for a MEG/East run whilst BOT/UKCM is steady in the WS 50’s (COGH).
Aframax
The North Sea market has softened with demand for tonnage weak and activity levels suffering. Hands are being forced with ballasting out of the region high on the agenda for owners heading out to try their luck elsewhere. Despite the exodus, vessels are still around to be picked up with fixing off the right dates seemingly the only thing that can save Owners Day.
Activity is lacking in the Mediterranean with vessels piling up on the tonnage list. Owners may well try to explore possible alternatives. Dates are up to end month now and a continued correction downward seems inevitable in the current climate. Even if activity picks up quickly, a proper clear-out is mandatory if we are to see a turning of the tide.
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Source: Fearnpulse
