July 15, 2016
The following is an overview of tanker spot market activity for the week ending July 15, 2016
Volume fell off significantly in the Arabian Gulf, but tates for AG/East remained steady in the low WS 40s, while AG/USG edged up slightly during the week to WS 27 via the Cape. The decrease in fixture activity extended into the Western Hemisphere, with only around 10 deals reported. Rates for West Africa to East Coast India paid US $3.65 million for a replacement fixture, while West Africa/China moved up slightly from WS 47.5 to WS 48.25 later in the week. Caribbean/Singapore is currently being assessed at US $3.8 million.
Activity fell slightly in West Africa and rates held steady in the beginning of the week as WS 65 was concluded for a voyage to the US Atlantic Coast and WS 67.5 fixed/failed a couple of times to the UKC-Med. As the week progressed, this market felt some pressure and eventually WS 55 was fixed for UKC-Med and two vessels were put on subs to the US Gulf at the same level.
Another week of thin activity in the Black Sea took a toll on the region as a handful of vessels were reported fixed or on subjects. Freight rates ex-Black Sea barely held their ground as WS 75 was fixed/on subjects for UKC-Med discharge.
There was an uptick in fixing in the Caribbean, but it was not enough to make up for the brutal lack of inquiry last week which continued to plague TD9 in the form of a lengthy tonnage list. A new year-to-date low was set at WS 75 and returns are now less than $5,000 per day. It seems unlikely this route will trade any lower. The TD19 route eased approximately 10 WS points and is now a soft WS 80 ahead of the weekend. There was a low WS 70s number done for a longer voyage, but the typical shorter business should see rates in the WS 80s.
Market conditions in the Caribbean remained on a dreadful course and rates continued to fall from last done levels. Up-coast fixing has dipped to WS 80 and an overage of tonnage leaves little to get excited about. Activity did increase this week in comparison with weeks past, but we will need continued activity to swing momentum in the other direction. It was a week of fixing and failing in the UKC-Med and the market seemed poised to fall as tonnage ballasts in from the Caribbean. Rates hit triple digits, but mid-WS 90s fixed and failed this week. There is some inquiry outstanding, but healthy tonnage lists will likely push rates back into the WS 80s soon.
The UKC/USAC voyage opened soft at WS 90, but by Friday, TC2 moved up 12 WS points to the WS 102.5 level. Owners are now talking in the WS 110-115 region for this voyage. The USG opened with plenty of inquiry as 8-10 fresh cargoes hit the market on Monday, but we saw about 4-5 LR1s cannibalize MR stems in the 20-25 window, which halted the early week momentum. The USG/UKC trade ebbed and flowed between WS 67.5 and 72.5 for most of the week, but ultimately closed where it opened at WS 70.