Tanker Market Weak Throughout November
Global spot fixtures rose m-o-m in November, after dipping lower the month before, increasing 0.22 mb/d, or 1.5%, to average 15.09 mb/d. The increase came as Chinese refiners returned to the market after a pause due to the Golden Week holiday and as independent refiners received another round of import quotas. Spot fixtures were still 4.9 mb/d, or almost 25%, lower than the same month last year, reflecting the overall muted environment due to the COVID-19 pandemic.
OPEC spot fixtures averaged 10.19 mb/d in November, representing an increase of 3% m-o-m, or 0.3 mb/d. Compared to the same month last year, OPEC spot fixtures were 28% lower, or almost 4 mb/d, reflecting in part production adjustments by OPEC countries. Fixtures from the Middle East-to-East averaged 6.5 mb/d in November, representing a gain of 0.6 mb/d, or 10%, m-o-m. Y-o-y, this represents a decline of 1.6 mb/d or almost 20%. In contrast, Middle East-to-West fixtures were sharply lower in November, falling 46%, or 0.6 mb/d, to average 0.7 mb/d. This was still 0.9 mb/d, or 56%, lower compared with the same month last year. Outside of the Middle East, fixtures increased 10% m-o-m, or 0.3 mb/d, to average just under 3.0 mb/d. In annual terms, fixtures were down by almost 32% or 1.4 mb/d.
Sailings and arrivals
OPEC sailings increased 1.7% in November, or 0.35 mb/d, to average 21.07 mb/d, compared with a yearhigh of 25.5 mb/d recorded in April. The increase came as more Libyan barrels became available in the market. Y-o-y, OPEC sailings were 4.3 mb/d, or 17%, lower. Middle East sailings averaged 14.6 mb/d, representing an increase of 0.3 mb/d, or 2% m-o-m, but down almost 3.9 mb/d, or 21%, compared to the same month last year. Crude arrivals in November increased m-o-m in all regions except North America. Far East arrivals led gains, increasing 14% m-o-m, or 1.4 mb/d, to average 11.1 mb/d. Arrivals in Europe continued to move higher m-o-m , averaging 10.3 mb/d, representing a gain of 3%, or 0.3 mb/d, over the previous month, but were still 1.3 mb/d, or close to 12%, lower y-o-y. Arrivals in West Asia were higher by 2.5% m-o-m, or 0.1 mb/d, to average 5.38 mb/d.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates continued to edge lower in November, falling on average 5% m-o-m, as tonnage demand continued to be weak and the unwinding of floating storage increased availability. Rates on the Middle East-to-East route fell a further 5% m-o-m in November to average WS26 points. Y-o-y, rates were more than 70% lower compared with the same month last year. Rates on the Middle East-to-West route declined 7% m-o-m to average WS17 points. Y-o-y, rates have declined 70%. Rates also dropped on the West Africa-to-East route, decreasing 2% m-o-m to average WS30 points. Rates were 69% lower compared with November 2019.
Suezmax rates managed a positive performance in November, with average spot freight rates gaining 12% on average m-o-m, as the market picked up from a dip October. However, they were still 68% lower y-o-y. On the West Africa-to-US Gulf Coast (USGC) route, Suezmax rates averaged WS32 points in November, representing a 19% gain from the month before. Y-o-y, rates were 70% lower than in November last year. The Northwest Europe (NWE)-to-USGC route rose 6% m-o-m to average WS31 points, but this still represented a 66% decline from the same month last year.
Aframax rates also turned in a positive performance in November, increasing for the second-consecutive month. Compared to the previous month, rates were up 8% in November, but still 61% lower y-o-y. The Caribbean-to-US East Coast (USEC) route was the main contributor to the increase, enjoying a 49% improvement m-o-m in November to average WS69, yet 55% lower y-o-y.
Developments in the Mediterranean were mixed. The Cross-Med route continued to increase, gaining 3% m-o-m to average WS62. In contrast, the Mediterranean-to-NWE route declined 5% m-o-m to average WS53, which represented a 65% drop y-o-y. The Indonesia-to-East route also declined 5% m-o-m to average WS53, some 62% lower y-o-y.
Clean tanker freight rates
Clean spot freight rates continued to edge higher m-o-m in November, up 2% due to an ongoing improvement on West of Suez routes. Rates on westward routes were 5% higher on the month. The Mediterranean region experienced gains both Cross-Med and Med-to-NWE, increasing by 7% and 13%, to average WS77 and WS83 points, respectively. Rates on the NWE-to-USEC route declined by 3% m-o-m to average WS76 points.
East of Suez rates edged down 1% m-o-m in November and remained some 47% lower compared with November 2019. Gains on the Middle East-to-East route were not enough to offset losses on the Singaporeto-East route, which averaged WS73 and WS94, respectively.
Nikos Roussanoglou, Hellenic Shipping News Worldwide