Weekly Tanker Summary
July 1, 2016
The following is an overview of tanker spot market activity for the week ending July 1, 2016
VLCC
Activity remained steady in the AG and rates continued their upward trend in the early part of the week, but once the supply situation was reevaluated, rates started to pull back slightly, especially for disadvantaged tonnage. At the time of writing, AG/East was steady in the mid-WS 40s and AG/West in the high WS 20s. (To read more about the increased use of disadvantaged VLCC tonnage – download Industry Note No. 8 – Plenty of Suitors for These Older Ladies)
Activity declined week-on-week in the Atlantic Basin. Rates were steady or slightly weaker in most markets the Caribbean tonnage list started to stack up. West Africa/West Coast India rates are expected to pay around US $2.8-$3 million, while WAFR/China rates fell to the WS 52.5 level at the time of writing. The UKC/Korea paid US $5.1 million and as low as US $3.15 million to Singapore.
SUEZ
Activity increased slightly week-on-week in West Africa as nine vessels were reported fixed/on subjects. Voyages to the UKC-Med fetched 130,000 x WS 67.5-70 levels, while destinations to the West were paying 5 WS points lower.
Steady volume in the Black Sea/Med allowed for freight rates to climb as the week progressed. Although initially dipping into the low WS 70s, rates for loading in the Black Sea were concluded twice at 135,000 x WS 81.25. Cargoes loading in the East Med fetched in the low-mid WS 70s, while a replacement cargo Arzew/Australia achieved US $3,650,000 – an increase of US $150,000.
Volume fell in the Americas week-on-week as just four ships were reported fixed/on subjects. Carib/USG rates dipped by 5 WS points as 150,000 x WS 70 was concluded. An East Coast Mexico/Spain fixture was done at 147,000 x WS 40 – a drop of 5 WS points from last done. The West Coast markets held their ground as 130,000 x WS 97.5 was fixed PTP/USWC and Salina Cruz/Japan was repeated at the US $2.15 million level. An export cargo from Brazil covered at 130,000 x WS 70 to the US Gulf, plus 10 WS points for Chile.
AFRA
This past week was surprisingly quiet in the Caribbean given the upcoming Fourth of July holiday and we appear to have bottomed at WS 82.5 for TD9, which is returning below $6,500 per day on a TCE basis. The TD19 route trended down approximately 12.5 WS points on the week. There are a few cargoes working and we estimate they will go for something around the WS 105 mark.
PANA
It was another quiet week in the Caribbean with little reported activity. Rates softened to WS 95 levels up-coast late week and will likely remain depressed for the foreseeable future. It was a busy week off the UKC and Med, but most fixing was achieved under the radar. Rates dipped early week to WS 82.5 for Med/USG voyages, while the UKC was slightly stronger at around WS 90. With other sectors weak, there will be little undulation in the forecast.
CLEAN
The UKC/USAC voyage opened firm at 37,000 x WS 97.5 before a replacement job helped shift the market to WS 107.5. By week’s end, this market settled at the WS 105 level. Despite there being a rush of activity in the US Gulf market, the USG/UKC trade moved sideways throughout the week and closed up only 2.5 WS points at 38,000 x WS 65. Meanwhile, the USG/Carib market flat lined throughout the week and ultimately closed down US $10,000 and was last confirmed at US $340,000.
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