The VLCC market experienced a significant uptick yesterday, with rates reaching WS 70 for MEG/East routes. This translated to daily earnings exceeding USD 50,000 per day for some vessels, reports Fearnleys.
VLCC
The VLCC market experienced a significant uptick yesterday, with rates reaching WS 70 for MEG/East routes. This translated to daily earnings exceeding USD 50,000 per day for some vessels.
However, the market is still awaiting stem confirmations from Saudi Arabia, which may impact charterer behavior. High rates could lead to increased demurrage costs if charterers are unable to meet their laycan deadlines. This may prompt some charterers to adopt a more cautious approach, waiting for stem confirmations before committing to fixtures.
Suezmax
The current dry bulk market exhibits similarities to the Q4 2019 bull run, primarily driven by strong demand from the East. While the market is still in the early stages of this upswing, the potential for significant market shifts, as witnessed in 2019, is evident.
In 2019, a surge in demand from the East significantly impacted global freight rates, particularly for VLCCs. This “top-down” effect subsequently influenced other vessel segments, including Suezmaxes.
The recent imposition of sanctions on Russia may further amplify this trend, potentially shifting the market focus back to the East and driving VLCC demand. This could lead to a “butterfly effect,” where strong VLCC demand cascades down to impact other vessel segments, similar to the events of 2019.
Aframax
The dry bulk shipping market is navigating the new Worldscale schedule in the first week of 2025. Limited market activity has put pressure on rates, with the fixing window extending into the second half of the week. While the US market is showing signs of improvement, overall market sentiment remains subdued.
A combination of factors, including a lack of early-week activity and Suezmaxes absorbing Aframax cargoes, has resulted in a significant backlog of available vessels. This oversupply, coupled with “summer-like” market conditions in the middle of winter, has negatively impacted market sentiment, suggesting that a turnaround in the current situation may take some time.
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Source: Fearnleys
