Crude Oil
East
VLCCs in the AG have faced a rather uneventful week. Charterers looked to cover the remaining 3rd decade stems, however, the tonnage list has remained well stocked allowing ships to be picked off at desirable levels. Today we are calling 270 AG/China WS46 and 280 AG/USG at WS32.
Suezmax rates in the region have been consistently getting chipped away at, with sentiment sitting on the weaker side, as the larger sizes continue to get involved and Suezmax Owners await Basrah dates. With Owners still looking at opportunities to clean ships up there is only so far TD23 can be pushed which we now estimate at 140,000mt x WS62.5 level via C/C.
West Africa
The WAF VLCC market has experienced a lull in market activity this week, however, under the radar this region has seen a decent flow of interest for ships willing short options which is helping to tighten the front end of the tonnage list. In today’s market we estimate that the current rate for WAF/China should be around WS51.5.
The West African market remains steady for now on Suezmaxes though the VLCCs continue to put pressure on the market as fixing dates align this month. It’s likely the list will remain healthy this coming Monday, as the USG took a knock on sentiment overnight. Charterers are likely to look to chip away at TD20 with it likely to pay around WS97.5 today.
Mediterranean
TD6 remains steady at around 135,000mt x WS120 with limited enquiry this week that will hopefully pick up as dates get released. Rates to head East were tested this week and are steady at a level of $5.0M for Libya/Ningbo run via the Cape.
US Gulf/Latin America
The USG VLCC market started slowly this week, because of closures around Houston due to hurricane Beryl. As we moved through the week the Atlantic basin had a handful of cargos working, however, this led to further chipping away at rates which had been supported by well placed tonnage and a lack of activity in the surrounding regions. The Brazil export market saw another quiet week with only a couple of stems working. One market cargo was able to achieve a healthy amount of offers which gave Charterers an opportunity to apply pressure on freight levels. We expect a USG/China run will fix in the region of $7.30m while we estimate a Brazil/China run is paying around WS50.
North Sea
Despite the weather, it has been a typical summer week for North Sea Aframaxes with attitudes to the market all pretty equal. Levels are flat trading at WS127.5 with nothing to suggest that we will be going North of WS130 any time soon. The near end of the list doesn’t hold a huge amount of choice but for the natural window there is still ample tonnage. We can see levels coming off further at the start of next week.
Clean Products
East
A busier week on LR1s has left a shortage especially for Westbound runs. Rates have quickly breached $5.0 million and we are now seeing LR2 rates asked by the handful of Owners willing in that direction. Add to that consistent short volume and the LR1s are pushing on generally. TC5 is overpriced against LR2s at WS220 and cargoes must more and more be stemmed up to take advantage. LR2 Westbounds have softened down to approach parity on the LR1s at around $5.7 million. So where a Charterer can, they will use the bigger tonnage. But where port restrictions prevent such upsizing, LR1s may see even higher rates paid. Overall, the focus has to now rest on the LR2s and we should see them busier into the new week with rates stabilising and then an upswing fairly quickly.
MRs east of Suez have faced another week where Owners have been forced to take what’s on offer largely at last done levels. A lack of activity – both on and off market – has kept the top of the list ticking over but the natural window is well stocked. TC17 has hovered around the WS245-250 mark with a Duqm outlier achieving a premium. TC12 dropped below the WS200 mark to WS195 from Mumbai and Westbound remains untested. Going forward there is no sign of a swing just yet and with SE Asia soft the potential for Singapore ballasters will also serve to keep a lid on a significant bounce in rates.
Mediterranean
Positive week for the Handies here in the Mediterranean with rates picking up again after a quiet couple of weeks. 30 x WS185 was the call for Xmed on Monday morning but with the list tightening due to an uptick in enquiry from Friday, rates soon started to move with 30 x WS200 achieved by midweek. Since then we have seen some tricky cargoes get caught out with 30 x WS300 on subs for a restricted cargo. At the time of writing vanilla Xmed sits at 30 x WS245 with Black Sea in need of a fresh positive test. Market firm into the weekend.
Finally to the Med MR market where it’s been a slow and steady week with not a great deal of action to report. Rates have traded flat at the 37 x WS175 mark for Med/TA throughout the week apart from 37 x WS182.5 seen ex Sines. WAF activity has been minimal with levels expected to land at 37 x WS195 when next tested. Heading into the weekend there is nothing left outstanding so expect a quiet finish.
UK Continent
A bit of a rollercoaster for the UKC MR sector which started with much hope but after a quiet start to the week, much of this positivity dissipated. With some Owners holding for WS200+ on Monday, we saw enquiry trickle out into the market with limited success from the Owning fraternity and come Wednesday rates were struggling to hold 37 x WS180. Charterers continued to play their cards close to their chests as we see the second half of the week offer some good activity and come Friday we see a good clear out of tonnage. Rates continue to wobble around the 37 x WS175-180 mark but feel Owners have a few more arguments to keep rates stable. A bullish end to the States market should keep ballast tonnage away and if this can continue into next week, then no doubt Owners will start to look to press on last done ideas.
There has been improved demand seen this week for ULSD moving XUKC as a healthy amount of Handies have been fixed for this run. Levels started at 30 x WS165 but as the front end of the list started to tighten, Owners managed to push levels to 30 x WS170. The weekend break will enable a few more vessels’ itineraries to firm so it will be pivotal that Monday kicks off on a busy note.
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Source: Gibson
