WS Rates Moves Up Creating Atlantic Excitement

VLCC

A busy, breathless week. Plenty of fixing as WS rates moving up WS 10 points since the start of the year. Mainly due to the Atlantic excitement. At the time of writing, TD3C sits just below WS 70, but the MEG market taking a back seat. January volume is closing out with a healthy figure close to the 140 level, so another 10 or so deals to come. We are nearing the end of January dates and the quieter twilight zone between months, so rates likely to level out for the time being.

However, the Atlantic holding all the cards. Sinokor beginning to flex their Atlantic muscles, having taken 5-6 ships on spot voyages, quick subjects, with no cargoes attached. They now ready to work these vessels, fixing one ex EC Mexico to India, but a few more still to fix. With highest they paid at USD 9.7m USG to Ningbo, providing any potential demurrage bill is minimalized, they should be in the money, as we rating TD22 USG/Ningbo at USD 10m. USD 5m has been paid USG/UKC, and West Africa reports at WS 75 done, but not widely believed, as Bitr TD15 still around the WS 72.5 level. Rates? – We are still low on fixture volume for February in both West Africa and USG, and a lot will depend on Sinokor frame of mind and charterers attitude. Likely a little steadying in the short term but certainly little downside.

Suezmax

The East market has been quiet on the surface with the vast majority of business being done off market, which has done nothing to support rates in the region (OTC markets require noise otherwise they die). Despite the best efforts of tanker-terrorists in the Red Sea, TD 23 continues to soften with last done pricing WS 80 (23 flats). MEG/East appears stuck in limbo with a MEG/China run likely to trade circa WS 130-135 (24 flats).

In the West, the USG/East arb is still wide open which has resulted in a deluge of enquiry from the US Gulf being smoked into the open market. This will further support rates in the wider Atlantic with no evident downside for now.

Aframax

All eyes have been on the USG market as the candidates for local runs look few and far between. Owners continue to push rates higher though with predominantly relet based tonnage we haven’t seen the full effects of the USG pull as we have done in the Mediterranean. It remains to be seen if 3rd decade stems will be busy in this region, as dates push out, owners are hoping rates will move upwards too.

The Mediterranean Aframax market continues to show the potential for positive trends in rates, with poor weather affecting itineraries on the few ships that are not being enticed by trade over in the States. Lack of supply or business done off market might stem the increase in rates but should demand increase, then pressure on rates is likely to continue to strengthen the market. Black Sea trade was tested up this week and may well continue with inclement weather causing delays/closures in the Turkish Straits.

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Source : Fearn pulse

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