Tankers: VLCC Spot Market Grew by 16% During August
Clean rates fell for the second month in a row, with rates on the NW Europe to US East Coast down 6%.
The latest estimates show global spot fixtures declined in August to average 14.6 mb/d. Fixtures fell 1.6 mb/d, or almost 10% m-o-m. Compared with the previous year, spot fixtures were negligibly higher, increasing by less than 1%.
OPEC spot fixtures fell in August, averaging 10.1 mb/d. This represents a decline of 13%, or 1.5 mb/d. In comparison with the same month in 2021, fixtures were about 0.2 mb/d, or over 2%, higher. Middle East-to-East fixtures dropped 1.0 mb/d, or 14%, to average just under 6.0 mb/d. Compared with the same month last year, eastward flows were about 2% higher. Spot fixtures from the Middle East-to-West declined in August by around 0.8 mb/d, or 35%, over the previous month, to average 1.5 mb/d. Y-o-y, rates were 0.6 mb/d, or about 68% higher. By contrast, outside the Middle East, fixtures rose in August to average 2.6 mb/d. This represents a gain of 14%, or about 0.3 mb/d, m-o-m but a decline of 0.5 mb/d, or 15%, y-o-y.
Sailings and arrivals
OPEC sailings increased by 0.1 mb/d, or less than 1%, m-o-m in August to average 22.5 mb/d, and were 1.8 mb/d, or about 9%, higher compared with the same month a year ago. Middle East sailings increased by about 0.3 mb/d in August to average 17.5 mb/d. Y-o-y, sailings from the region rose by 1.9 mb/d, or around 12%, compared with August 2021.
Crude arrivals in August saw m-o-m gains across all regions. The Far East led gains, up by 1.2 mb/d, or almost 9%, to average 14.5 mb/d. Y-o-y, arrivals in the region were 0.3 mb/d, or about 2%, higher. Arrivals in the West Asia were 0.2 mb/d or 2% higher at 8.2 mb/d, while y-o-y, they were 1.0 mb/d, or 14%, higher. In North America, arrivals were 0.3 mb/d or about 4% higher m-o-m, averaging just under 9.0 mb/d, but were marginally lower y-o-y. Arrivals in Europe rose by 0.5 mb/d, or about 4%, to average 13.9 mb/d. This was 1.2 mb/d, or about 10%, higher than in the same month last year.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates continued to pick up in August, rising 16% on average m-o-m. The sector saw support from a return of US crude flows to Asia. Y-o-y, VLCC rates were up 111% on average. On the Middle East-to-East route, rates gained 17% m-o-m to average WS68 points and were 119% higher y-o-y. Rates on the Middle East-to-West route rose 17% m-o-m to average WS41 points. Y-o-y, rates on the route increased 95%. West Africa-to-East spot rates gained 17% m-o-m to average WS70 points in August. Compared with the same month last year, rates were 112% higher.
Suezmax rates edged higher in August, increasing 4% m-o-m, to remain well above last year’s lacklustre performance. Rates were supported by ongoing trade dislocations, which boosted demand for longer-haul voyages in the Suezmax class. Rates on the West Africa-to-US Gulf Coast (USGC) route remained at the previous month’s healthy level in August, averaging WS124 points. Compared with the same month last year, rates were 148% higher. Spot freight rates on the USGC-to-Europe route rose 9% over the previous month to average WS122 points. Y-o-y, rates were 221% higher.
Aframax spot freight rates also continued to move higher, lifted by the strength of East of Suez and the Atlantic Basin. On average, spot Aframax rates rose 5% m-o-m. Compared with the same month last year, rates were 159% higher. Rates on the Indonesia-to-East route jumped 25% m-o-m to average WS228 points. Y-o-y, rates on the route were up 128%. Spot rates on the Caribbean-to-US East Coast (USEC) route increased 21% m-o-m to average WS299 points. Y-o-y, rates were 260% higher.
By contrast, spot freight rates retraced some of the gains seen in the previous month. Cross-Med spot freight rates fell 4% m-o-m in August, to average WS201 points. Y-o-y, rates were still 134% higher. On the Mediterranean-to-NWE route, rates dropped by a stronger 20% m-o-m to average WS174 points. Compared with the same month last year, rates were around 120% higher.
Clean tanker freight rates
Clean spot freight rates saw across-the-board declines, falling from relatively high levels with the end of the driving season in the Northern Hemisphere and a shift towards refinery maintenance. On average, rates fell 6% m-o-m in August but were still up 129% compared with the levels seen in the same month last year. Losses were seen on both sides of the Suez, but primarily in the East.
Rates on the Middle East-to-East route declined 6% m-o-m in August to average WS269. Y-o-y, rates were up 119%. Freight rates on the Singapore-to-East route dropped by 14% m-o-m to average WS342 but were 116% higher compared with the same month last year. In the West of Suez market, rates on the Northwest Europe (NWE)-to-USEC route decreased 6% m-o-m to average WS291 points. They were 149% higher y-o-y. Rates in the Cross-Med and Med-to-NWE edged down about 1% each to average WS271 and WS282 points, respectively. Compared with the same month last year, rates were 134% higher in the Cross-Med and up 126% on the Med-to-NWE route.
Nikos Roussanoglou, Hellenic Shipping News Worldwide