Aframax dirty tonne days from Med/UK Continent to the Baltic / Black Sea

The Aframax dirty tonne days experienced a significant surge in growth starting from mid-January, particularly in the route from the Mediterranean to the Baltic/Black Sea.

By the end of February, the freight market sentiment once again showed weakness in the VLCC MEG-China route, despite hopes for an upturn. Concurrently, the number of vessels in Ras Tanura recorded increased levels above the annual average. It appears that the VLCC market is striving to strike a stronger balance between supply and demand in favor of demand, yet the abundance of supply continues to weigh on the momentum for firmer pricing in market rates.

In terms of demand and the growth of tonne days, there was a glimmer of hope in the second month of the year with a rise in the Aframax segment, along with signs of a potential reversal in the growth of VLCC tonne days. Particularly noteworthy is the notable spike in the growth of total days from mid-February in the Mediterranean/UK continent to the Baltic and Black Sea routes. It remains to be seen how this upturn will manifest in the freight market momentum as we progress into March, nearing the end of the first quarter.

SECTION 1/ FREIGHT

Market Rates (WS)

‘Dirty’ WS – Weaker​

VLCC – Suezmax – Aframax

By month-end, the spikes witnessed during the last week along the VLCC MEG/China route started a downward correction. Meanwhile, the Suezmax segment initially exhibited signs of building stronger momentum before subsequently declining in both the Wafr Cont and Suez Baltic Med routes.

VLCC MEG-China freight rates plummeted to 60WS, marking a drop of nearly 30 points compared to the highs of the previous week. These recent levels appear to be the lowest observed since the beginning of the year.
Suezmax freight rates for shipments originating from West Africa to continental Europe hovered just above 100WS, indicating a weekly decrease of 7%. At the same time, in the Suez Baltic Med route, rates fell to 112WS, marking a notable 12% decline compared to the previous week.
Aframax Med freight rates have plummeted to levels even lower than the bottom recorded during week 5. Presently, rates have dipped by 50 points from the previous week to 130 WS, indicating a significant 38% decrease compared to levels observed a month ago

‘Product’ WS

LR2 Weaker

LR2 AG freight rates extended their downward trajectory until the month’s end, reaching 160 WS, nearly 30 points below the levels observed the previous week. This translates to a significant 20% weekly decrease and signifies a staggering 55% decline compared to rates recorded during a similar week one month ago.
LR1 Weaker

Panamax Carib-to-USG rates hovered 20 points weaker than the previous week dropping around 340 WS, but still 37% higher than the lows observed in a comparable week a year ago.

‘Clean’

MR Mixed

​​​​MR1 rates for the Baltic continent remained stable, standing at around 340 WS, maintaining a consistent outlook over the past seven weeks. MR2 rates for shipments from the continent to the USAC firmed this week, settling at 260 WS, marking a 10% increase compared to the previous week’s figures.

For the MR2 route from the US Gulf to the continent, rates have settled at 155 WS. This marks a 16% weekly decrease and reflects a sentiment 30% weaker compared to rates recorded a year ago

SECTION 2/ SUPPLY

‘Dirty’ (# vessels) – Increasing

Recent weekly indications suggest a rise in the number of vessels for the VLCC Ras Tanura segment, a trend confirmed by month-end data. Additionally, an uptick has begun to emerge in the Aframax Primorsk and Med Novo segments.

VLCC Ras Tanura: The ship count rose 67, 7 more than the annual average, and representing an increase of nearly 17 vessels compared to the low recorded during week 7.
Suezmax Wafr: The current ship count stands at 66, marking a notable increase of 6 compared to the previous week. However, the end-of-month figure still remains significantly lower than the peak observed in week 2, which saw approximately 89 vessels.

Aframax Primorsk: The current number of ships has risen to 37, indicating an increase of 10 compared to the previous week. This surge brings the numbers higher than the annual average, following a period of consistent lows over the last five weeks.

Aframax Med Novo: The number of vessels surpassed the annual average of 10 for the first time since the end of week 5, defying earlier estimations that suggested a continued trend below the annual average until the end of February.

‘Clean’

LR2 (#vessels) – Increasing

MR (#vessels) – Mixed

​​​​Clean LR2 AG Jubail: The downward trend observed in February has reversed into an upward trajectory over the past two weeks, with vessel levels rising to 12. This marks an increase of 5 compared to the previous week and has ultimately surpassed the annual average for the first time since the end of week 3.

Clean MR: The most recent vessel activity for MR1 Algeria Skikda stayed around 30, showing a trend below the annual average over the last two weeks. Meanwhile, in MR2 Amsterdam, the number of vessels has increased to 44, marking a rise of 20 compared to levels from two weeks ago.

SECTION 3/ DEMAND (Tonne Days)

​​‘Dirty’ Increasing

Dirty tonne days: At the end of February, an eventual increase was observed in VLCC tonne days, while Aframax tonne days remained at high levels compared to the lows recorded two weeks ago. In the Suezmax segment, the decreasing momentum persisted compared to the peak observed four weeks ago; however, there is potential for a reversal in momentum in early March.

‘Clean’ Mixed

Panamax tonne days: The outlook remains unchanged, showing steady growth throughout the month, although it appears that levels peaked four weeks ago.

Clean MR tonne days: The growth of tonne days in the MR1 vessel size continued to reflect the weakness recorded from the previous week, reaching its lowest level observed in the past year.

Meanwhile, the growth rate for MR2 vessels continues to maintain a consistent pace since the beginning of the year
Source: By Maria Bertzeletou, Signal Group, https://go.signalocean.com/e/983831/Account-Login/2px742/386179759/h/DdutSkYQxmkPWA8w3Gecv0aqnfkPJ05asnTmUcWbGAA