June 3, 2016
The following is an overview of tanker spot market activity for the week ending June 3, 2016.
Activity levels continued to climb in the Arabian Gulf and AG/East rates slowly rose back into the mid-to-high WS 60s, while AG/West paid in the mid-WS 30s. We are now heading into the third decade of June with 90 vessels fixed so far for the month and we would expect to see another 30-35 ships fix before the June program comes to a close. In the Atlantic Basin, WAFR/China increased slightly to the mid-WS 60s, up from the high WS 50s at the close of the previous week.
Volume fell off a bit in West Africa week-on-week, but rates jumped significantly and by mid-week a rate in the upper WS 80s was achieved several times for UKC-Med discharge. By week’s end though, rates fell back into the low WS 80s.
Black Sea activity levels fell considerably; however, two firm fixtures from the Black Sea to the UKC-Med gave the impression of a strengthening market. The strike is France is certainly adding to the positive sentiment, but how long will this last?
There was a spattering of fixing in the Americas, but the subtle improvement in rates was more a reflection of the burst in West Africa and not the overall health of this market. A voyage ECM/Spain traded in the low WS 40s, while WC Mexico/Japan achieved just under US $2.4 million.
The Caribbean TD9 market traded range bound between WS 97.5-WS 100. The lengthy delays faced by ships waiting to discharge in Bullen Bay have yet to result in a firming market. Black Sea/Med rates firmed over the long holiday weekend, peaking at WS 120 with some of the activity attributed to pre-Posidonia fixing.
Activity was light in the Caribbean for this vessel class, but rates climbed to just above WS 117. Tonnage has started to stack up again and rates will likely come under pressure when tested, especially as we head into Posidonia week. In the UKC-Med market, most of the reported fixing was for replacement inquiry off fairly prompt dates. Rates hovered around the WS 122.5 benchmark to the US Gulf, but we can expect the coming week to be quiet and for the market to soften off natural fixing dates in the near term.
The UKC/USAC route opened at the WS 110 level and due to a healthy tonnage list, fell to WS 107.5. As the US Gulf continues to struggle, we can likely expect more ballasters from the Americas to head to the UKC.
The US Gulf market opened sluggishly after the long Memorial Day weekend in the States. A lengthy tonnage list and a lack of activity caused USG/UKC rates to fall to the WS 70 mark. If cargo activity does not improve, we would expect to see rates continue to soften in this market as the number of prompt ships starts to build.
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