The VLCC market experienced a downturn this week, with rates declining after a period of strong gains last week, reports Charles Weber Research.
Suezmax
The Suezmax sector in West Africa experienced a volatile week, with rates initially declining due to a lack of fresh inquiries. This led to a decrease in rates below the ws80 barrier for WAF>UKCM routes. However, in the second half of the week, rates stabilized and rebounded slightly to ws77.5, supported by stronger returns in the Mediterranean and AG markets and the emergence of late February West African barrels.
In the Americas, Suezmax inquiry was limited towards the end of the week, suggesting potential downward pressure on rates. USG>UKCM rates remain stagnant at ws65 levels, while Guyana>UKCM trades at a 5-7.5-point discount to TD20 at ws70. USG>EAST rates remain pegged at $4.7 million for Singapore and $5.2 million for Long East discharges, but these levels remain untested.
Aframax
Despite some activity this week, the market lacked the necessary momentum to push rates in the opposite direction. Routes into Europe have dropped to around ws115 (basis 70k MT), with local routes expected to settle at similar levels, indicating a general softening in the market.
This downward pressure appears to have reached a point where further declines are limited. As a result, market participants can expect owners to adopt a more resistant stance heading into next week, as they begin to push for higher rates that are more in line with operational costs and a sustainable level of profitability.
MR
The CONT market experienced a cooling trend this week, with TC2 rates declining from an initial high of ws180 to ws165. In the USG, cargo activity was slow initially but picked up towards the end of the week, with TC14 rates fluctuating between ws115 and ws120. TC18 also saw a similar pattern, with rates falling from ws172.5 to ws165 before rebounding to the initial level.
TC21 rates experienced a similar downward trend, falling from $545k to $500k before recovering to $545k. Despite the downward trend, owners remain optimistic and are now offering rates higher than the last done levels.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Charles Weber Research
