June 24, 2016
The following is an overview of tanker spot market activity for the week ending June 24, 2016.
There was an uptick in AG activity week-on-week and a demand spike mid-week helped to absorb a lot of excess tonnage from June and the first 10 days of July. AG/East rates bottomed at WS 36-38 before bouncing back to the WS 45 level by week’s end. Rates for AG/West traded steady in the mid-WS 20s for the majority of the week and then moved up into the high WS 20s before close.
There was also an increase in fixing in the Atlantic Basin. Rates fell in most of the markets with Caribs/WCI fixed at US $2.9 million while Singapore paid around $3.6-$3.7 million. In West Africa, rates traded in a range between WS 49-52.5 for China. The active UKC market saw rates around $4.9 million to Korea and as low as $3.5 million to Singapore.
Volume fell off significantly in West Africa week-on-week as six ships were reported fixed/on subjects. Needless to say, TD20 fell from WS 87.5 to WS 77.5 in one shot and subsequent fixtures were done at lower levels as WS 67.5 was achieved for USAC discharge.
There were about 10 vessels fixed or put on subjects in the Black Sea/Med, but this market experienced a pullback in rates. Cargoes loading in the Black Sea for UKC-Med discharge settled quickly at the WS 75-77.5 level, while a voyage Ceyhan/USAC was covered at WS 60 and another at WS 68.75 basis UKC discharge.
The weak status quo continued for Aframaxes in the Caribbean. We have seen less than worldscale 90 get fixed and there is no end in sight for current sentiment. More activity was seen mid-week and it continued, but ample supply is keeping rates level for now and into the near term.
Last week ended with a lot of activity, which brought the cross-Med rates above the WS 120 territory. This past week started with some downward pressure in the WS 110 range, tighter tonnage lists helped give this market a boost and rates peaked at WS 125. Before week’s end, this market fell to the WS 120 level.
It was another quiet week in the Caribbean with little reported activity. Rates softened to WS105 levels up-coast and will likely remain depressed for the foreseeable future. It was an uninteresting week off the UKC with only a couple of reported fixtures. The market seemed poised to firm slightly, but a lack of activity kept rates between the WS 90-95 levels. We expect additional ballasting tonnage to add competition to the market in the coming week.
The UKC market finally showed signs of life as rates firmed for the first time in almost a month. An increase in activity into West Africa, coupled with a lack of ballasters from the US Atlantic Coast and East Coast South America, helped to push the UKC/USAC trade up 7.5 WS points to the WS 97.5 level. The climb in rates experienced last week in the US Gulf could not be sustained and this market tumbled back down to near yearly lows. The USG/UKC route initially lost 10 WS points as it traded around WS 65 and by week’s end fell further with WS 62.5 on subs.