Tankers: VLCC Market Looks for Direction from OPEC Decision

VLCC

In the Middle East the market to US Gulf (TD1 280k routing via the Cape/Cape) remains steadily assessed around the WS18-18.5 mark, while rates to China have marginally eased almost a point to the WS31.5-32 level (still showing a negative TCE round-trip $4.6k/day). In the Atlantic, rates for west Africa to China (TD15) were kept flat at the WS34 mark (also negative TCE about $1200/day) and US Gulf to China (TD22) is now assessed $56k lower at $3.975m (about $375/dayTCE).

Suezmax

Rates for 130k Nigeria/UK-Continent (TD20) have slipped two points to the WS51 level (a round-trip TCE of about minus $1,000/day). Meanwhile in the Mediterranean, the support from the Aframax sector has now dissipated and rates for 135k Black Sea/Med (TD6) are two points lower at WS60 (increasing the negative TCE to about -$6,300/day). The market for 140k Basrah/Med (TD23) fell 2.5 points to WS30 on the back of a fuller position list and less demand.

Aframax

In the Mediterranean, the market topped out and has gradually fallen away this week. Rates for 80k Ceyhan/Lavera (TD19) are down 16-17 points over the week now, at WS87.5 (approx $1,500 TCE). In northern Europe the market has also seen rate reductions, with rates for 80k cross-North Sea (TD7) shedding 12.5 points to the WS100-102.5 level (approx $375/day TCE), while similarly in the 100k Baltic/UK-Continent (TD17) rates fell away 13 points to WS70 (approx. $3,000/day TCE).

Across the Atlantic the market has again remained static as rates for 70k Caribbean/US Gulf (TD9) and EC Mexico/US Gulf (TD26) are still weighed to the floor at WS80 (a negative TCE region $2,800 / $2,200 respectively), while the 70k US Gulf/UK-Continent (TD25) market also seems stuck at WS70 (which shows a negative TCE of about $2,100 roundtrip, but positive basis single trip economics).

Clean

There was not a lot of movement in the Middle East Gulf market, where rates remained relatively static for LR2’s basis 75k to Japan (TC1) at around WS75 and dropped about five points on LR1’s for 55k cargo (TC5) to about WS80 level, which shows a TCE under $1,000/day on both. For MR tonnage to east Africa (TC17) rates fell about three points to around WS144, showing about $4,800/day TCE.

For MR’s in Asia, although $205,000 was fixed twice for SKorea/Singapore (TC11), there seems to be resistance to go lower as the TCE continues to be increasingly negative. Singapore to EC Australia (TC7) lost about five points to almost WS120 – which was fixed twice – with talk of possibly WS122.5 loading from Taiwan on subjects. Rates for South Korea to USWC (TC10) dropped below $20/ton level, giving a TCE close to $3,000/day, whilst Naphtha rates from WC India to Japan (TC12) fell almost 10 points to around WS95, which now shows a negative TCE for the round-voyage.

The Atlantic picture is not much better on some routes like Cont to WAfrica for LR1 (TC16), where rates are stuck at around WS80 and for MR tonnage (TC19) it moved up two points to around WS120, with rumours of WS125 fixed by BP. USGulf to Brazil (TC18) improved about seven points to WS135 level, with this level fixed basis Argentina destination on “Ainazi”. For Cont destination (TC14) a jump of over 15 points to around WS93, which is close to breakeven TCE. MRs from Cont into USGulf (TC2) nudged up over two points to around WS112, with talk of WS112.5 being fixed by Shell. Handy levels for cross Mediterranean (TC6) came off a couple of points to sub WS120 and a TCE close to $1,000/day, whilst for North Sea /Continent (TC9) rates were static at WS120. LR2 tonnage for Mediterranean to Far East (TC15) lost value to $1.775m, which is over $100,000 less than levels discussed last week and rumours that $1.7m on subjects.
Source: The Baltic Briefing