Tanker Market Remained Depressed During June
Global spot fixtures declined m-o-m in June, falling by 1.6 mb/d, or around 10%, to average around 14 mb/d. Declines in flows to East Asia and India were partly offset by a pickup in flows to Europe. Compared to the previous year, spot fixtures were around 1.0 mb/d, or almost 7%, lower than the same month last year.
OPEC spot fixtures fell m-o-m in June, down by 1.5 mb/d, or a little over 14%, to average 8.9 mb/d, amid lower flows to China and India. Compared with the same month last year, OPEC spot fixtures were almost 10% lower, down by just under 1.0 mb/d. Fixtures from the Middle East-to-West provided a minor bright spot for the month, averaging 1.0 mb/d in June, representing a marginal increase of 3% m-o-m, amid increased flows to Europe. Y-o-y, the route saw an increase of 0.3 mb/d, or almost 48%. Middle East-to-East fixtures declined by almost 17%, or around 1.0 mb/d m-o-m, to average close to 5.1 mb/d. The decrease came amid lower flows to China and India, which were offset by higher flows to Japan and South Korea. This was almost 1.1 mb/d, or 17%, lower than in the same month last year. Outside Middle East fixtures fell by 0.5 mb/d, or close to 15% m-o-m, to average 2.8 mb/d. Y-o-y, fixtures were down by just over 7%, or around 0.2 mb/d.
Sailings and arrivals
OPEC sailings rose m-o-m in June, gaining 0.6 mb/d or almost 3% to average 21.5 mb/d. Y-o-y, OPEC sailings were 1.6 mb/d or 8% higher than the very low levels seen last year. Middle East sailings edged up m-o-m in June to average 15.4 mb/d. This represents a slight gain of less than 1%. Y-o-y, sailings from the region increased 1.2 mb/d, or 9%, compared with the same month last year. With the exception of West Asia, crude arrivals were higher m-o-m on all routes in June. Arrivals in North America averaged 8.9 mb/d, representing a gain of 0.4 mb/d m-o-m, or around 5%, and a 1.2 mb/d, or over 16% increase y-o-y. Arrivals in the Far East averaged 13.4 mb/d, an increase of 0.9 mb/d, or close to 7% m-o-m, and a massive 5.0 mb/d, or almost 60%, higher than the same month last year. European arrivals rose 0.8 mb/d or 7% m-o-m in June to average 12.8 mb/d, representing a y-o-y jump of 2.9 mb/d or 29%. Arrivals in West Asia saw the sole m-o-m decline, falling 0.2 mb/d, or close to 3%, to average 6.1 mb/d. Y-o-y, West Asia arrivals were 1.3 mb/d, or 28%, higher.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates edged lower m-o-m in June, down 7%, and were some 36% lower compared with the same month last year. Rates on the Middle East-to-East declined 6% m-o-m to average WS32 points, as flows to China remained muted. Y-o-y, rates were 37% below the same month last year. Rates on the Middle East-to-West route also declined m-o-m, dropping 5% in June to stand at WS21 points, as ample availability outweighed a slight increase in fixtures. Y-o-y, rates were 30% lower. The West Africa-to-East route showed a loss of 8% m-o-m in June, averaging WS33, as uncertainties regarding crude import quotas constricted buying by Chinese independents. Rates were 38% lower compared with June 2020.
Suezmax rates were broadly flat m-o-m in June and were 7% lower compared to the same month last year. On the West Africa-to-USGC route, rates averaged WS45, a decline of 2% compared to the month before. Y-o-y, rates were 2% higher than in June 2020. Meanwhile, spot freight rates on the USGC-to-Europe route were unchanged at WS39 points. This was 15% lower compared with the same month last year.
Aframax rates erased the previous month’s gain in June, dropping 5% m-o-m, although some 31% higher than the same month last year.
Movements were mixed m-o-m, with the Indonesia-to-East route seeing a 2% decline m-o-m to average WS82. The Caribbean-to-USEC route erased the gains seen in the previous month, declining 21% m-o-m to average WS81 in June. However, y-o-y, rates on the route were 19% higher. Med routes enjoyed m-o-m gains in June. The Cross-Med route averaged WS91 in June, representing an increase of 5% over the previous month. Compared to the same month last year, rates were 47% lower. On the Mediterranean-to-Northwest Europe (NWE) route, rates rose 6% m-o-m in June to average WS83. Compared with the same month last year, rates on the route were 48% higher.
Clean tanker freight rates
Clean spot freight rates declined for the second month in a row in June, down 10% m-o-m, with losses across the board. East of Suez rates declined 7% m-o-m and rates to the west fell 12% m-o-m, respectively. Compared to the same month last year, East of Suez rates were 10% higher, while West of Suez rates rose 15%.
In the West of Suez market, rates on the Cross-Med and Med-to-NWE routes declined by around 13% each, to average WS130 and WS140 points, respectively. Y-o-y, rates were around 15% higher on both routes. Rates on the NWE-to-USEC route experienced a similar decline of around 12% m-o-m, to average WS116 points. Rates were 20% higher compared with the same month last year. In the East of Suez, the Middle East-to-East route saw a lesser decline m-o-m in June, falling 4% to average WS89. This represented a 9% increase compared with the same month last year. Meanwhile, freight rates on the Singapore-to-East route declined 9% in June compared with the previous month to average WS133. Rates were 11% higher compared with June 2020.
Nikos Roussanoglou, Hellenic Shipping News Worldwide