Tanker Market: A Dire Start to the New Year
Global spot fixtures declined m-o-m in January, falling by 2.6 mb/d, or 15.7%, to average 13.8 mb/d. Fixtures fell back from the high levels seen in the final quarter of the year. Spot fixtures were 4.4 mb/d, or around 24%, lower than the same month last year, prior to the COVID-19 impacts.
OPEC spot fixtures experienced a m-o-m decline of 0.8 mb/d, or 8%, in January to average 9.5 mb/d. The lower fixtures came ahead of planned and announced adjustments. Compared with the same month last year, OPEC spot fixtures were almost 25% lower, or down by around to 3.1 mb/d. Fixtures from the Middle East-to-East averaged 5.7 mb/d in January, representing a decline of just 0.2 mb/d, or around 3%, m-o-m. Y-o-y, this represents a fall of 2.0 mb/d, or almost 26%. In contrast, Middle East-to-West fixtures recovered some ground lost the previous month, increasing by 9%, or just under 0.1 mb/d m-o-m, to average 0.8 mb/d. This was still 0.3 mb/d, or 26%, lower compared with the same month last year. Outside of the Middle East, fixtures fell sharply in percentage terms, down by 0.7 mb/d, or 20%, m-o-m to average 2.9 mb/d. Y-o-y, fixtures were 0.8 mb/d, or 22%, lower.
Sailings and arrivals
OPEC sailings averaged 21.6 mb/d in January, representing a 1.0 mb/d, or over 4%, decline m-o-m. Y-o-y, OPEC sailings were almost 3.0 mb/d, or 12%, lower. Middle East sailings averaged 16.2 mb/d, representing a m-o-m increase of 0.1 mb/d, or less than 1%, but were down 1.7 mb/d, or close to 10%, compared with the same month last year. Crude arrivals in January rose on all routes with the exception of West Asia, reversing the previous month’s trend. Far East arrivals led gains, increasing by 1.1 mb/d, or over 10%, to average 11.9 mb/d. Arrivals on the route were also 3.2 mb/d, or 37%, higher compared with January 2019. Arrivals in Europe increased by 0.8 mb/d, or almost 8%, to average 10.8 mb/d. Y-o-y, arrivals on the route were almost 1.2 mb/d, or 10%, lower. North American arrivals increased by 0.5 mb/d, or 6%, but still registered a decline of 1.1 mb/d, or 12%, compared with the same month last year. Arrivals in West Asia relinquished all of the previous month’s gains, dropping by 0.8 mb/d, or nearly 13%, to average 5.3 mb/d. Compared to the same month in the previous year, West African arrivals declined 1.2 mb/d or almost 30%.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates continued to move higher from the very low levels seen since last summer, edging up 5% m-o-m, although remaining 60% lower compared with the same month of the previous year. Rates on the Middle East-to-East route were negligibly higher m-o-m, up 1% in January to average WS35 points. Y-o-y, rates were 62% lower compared with the same month last year. Rates on the Middle East-to-West route increased by 3% m-o-m to average WS24 points. Y-o-y, rates declined 55%. The West Africa-to-East route also saw a marginal increase to average WS36 points. Rates were 60% lower compared with January 2019.
Suezmax rates also saw gains in January, with average spot freight rates increasing by 21% m-o-m, although remaining 67% lower y-o-y. On the West Africa-to-US Gulf Coast (USGC) route, Suezmax rates averaged WS43 points in January, representing a 28% gain from the month before. Y-o-y, rates were 67% lower than in January last year. Spot freight rates on the USGC-to-Europe route rose 15% m-o-m to average WS41 points, although this still represents a 67% decline from the same month last year.
Aframax rates showed gains across all routes in January, rising 20% m-o-m. However, rates were still 63% lower compared with the previous year. The largest gain was seen on the Caribbean-to-US East Coast (USEC) route, where rates jumped 25% m-o-m to WS86.
Mediterranean route developments moved in tandem in January. The Cross-Med route increased by 20% mo-m to average WS72. Meanwhile, the Mediterranean-to-NWE route gained 19% m-o-m to average WS63, which represented a 54% drop y-o-y. The Indonesia-to-East route enjoyed an increase of 14% to average WS58, which was some 61% lower y-o-y.
Nikos Roussanoglou, Hellenic Shipping News Worldwide