Tankers: VLCC Market Weakens Even More This Week
The market weakened even further this week with rates dropping and the timecharter equivalent for the main front haul voyages heading towards, if not actually realising, negative returns. In the Middle East 280,000mt to US Gulf via the Cape/Cape routing is assessed another point down at WS18, whilst 270,000mt to China is rated a further four points lower than last week at just below WS30 (which translates into a timecharter equivalent of -$800/day). In the Atlantic, rates for 260,000mt West Africa to China fell two points this week to WS31 (about $1,650 per day). For voyages of 270,000mt US Gulf to China the market dropped another $100k to just below $4.2m, which corresponds to daily earnings of about $8,000/day basis a round voyage.
In the 135,000mt Black Sea/Med market we saw rates climb five points to WS63 (a timecharter equivalent of about $1,400/day). The West African market saw the biggest increase where 130,000mt Nigeria/UK Continent rates to WS57.5 (about $7,000 per day), up almost 20 points week-on-week. In the Middle East, the market for 140,000mt Basrah/Med voyages rose 6.5 points to WS18.5.
Rates for 80,000mt Ceyhan/Lavera were 2.5 points higher this week at WS72.5 level. In Northern Europe, rates for voyages of 80,000mt cross-North Sea dipped a point to WS77.5, while 100,000mt Baltic/UK-Continent saw a drop of three points to WS60 (about $2,500 per day). On the other side of the Atlantic, owners fared better than the previous week with rates for 70,000mt Carib to US Gulf recovering seven points to the high WS80s (about $4,100 per day) and in the 70,000mt US Gulf to UK Continent market rates firmed six points to low WS70s.
In the Middle East Gulf/Japan trade, the pressure has continued to build with limited enquiry. Owners have seen rates eroded further on both the LR routes with 75,000mt to Japan easing almost five points to around WS77.5. Meanwhile, in the 55,000mt trade, the market sits now in the mid WS70s having begun the week in the low WS80S. In the 35,000mt AG/East Africa trade, the start of the week saw rates read just down six points to WS165. They have continued to soften with the market now hovering at around WS160 level. For owners plying the 37,000 Cont/USAC market, levels stabilised at WS110, with a Brofjorden load covered at WS115. The backhaul trade of 38,000mt from US Gulf to UK/Continent saw rates soften 2.5 points back down to WS80, while the 38,000mt US Gulf to Brazil run is now at WS120 level representing a similar small loss of 2.5 points. In the 30,000mt cross-Mediterranean trade, owners again saw a firming market with weather delays contributing to a tighter position list. There was increased activity from East Med with WS160 done a couple of times from Greece – up from WS115 at the beginning of the week. WS185 is on subjects from Black Sea for early February loading.
Source: The Baltic Briefing