VLCC Tanker Market Up to a Slow Start to the New Year

With the holiday period now firmly behind, VLCC tankers are starting to show some moderate demand. In its latest weekly report, shipbroker Affinity said that “after a rather quiet festive period, VLCC lists have replenished somewhat and some owners are now starting to get impatient once again with the lack of volume – not implying resistance, but there is a chance that soon there could be more willingness to get cracking. With dates in the natural fixing window, whether East or West of Suez, it shouldn’t be too much of a tough task for charterers to keep things low and steady. A slight correction on the differential between TD3C and TD15 after competition saw sub-WS 45 locked in for a WAF/ECI run. On the other side, the equivalent of 270kt at circa WS 42.5 was done for a Taiwan run, bumping the Baltic assessment to WS 43.5. In the USG, TD22 has been seen getting paid at USD 6 Mn”.

According to Affinity, “it isn’t how any owners would have hoped to start the New Year, but then again, it was always going to be a slow end to this slightly awkward and broken few weeks. Next week, when we see most personnel on each side of the market come back online, we will maybe see a bit more activity. This, in turn, could start putting some upwards pressure on rates, especially as several relets have been tucked away now, which could provide more of a foundation for owners to put some pressure on. Also, rumours of a heavier third decade in the MEG should consolidate the floor”.

Meanwhile, “on the Suezmaxes, 2025 started on a very quiet foot, with minimal fresh activity and tonnage lists remaining lengthy. Freight rates have subsequently corrected, with TD20 TCEs now just shy of USD 20,000 per day, well below 24 December’s almost USD 25,000 per day. On the other hand, things remain pretty flat stateside, with just enough activity ex-Guyana to keep earnings flat at USD 18,000 per day levels since before Christmas. East of Suez also remains flat, with very little to report and earnings unchanged at USD 42,000 per day. There has been a dearth of activity also in the Med/Black Sea region and, with a softer Afra complex in the area, there could be a race to the bottom for freight rates, that is unless cargo demand picks up”, the shipbroker said.

Affinity added that “the Med Aframax list has really grown over the Christmas/New Year break. Numerous relets are being pushed and other owners look increasingly long, with some having over three vessels in the area – for now, there are seven FOCs, two more than the average over the past four weeks, but more are expected to come open over the weekend. Meanwhile, activity in the Med remains sluggish, and it feels this market will start shedding chunks, that is unless more cargoes come out. For now, X-Med is closing the week at WS 142 (basis 2025 flats), which translates to earnings of about USD 32,000 per day for an ECO ship”.

Additionally, “there have been heavy corrections also in the USG, with the local market nosediving amid a lengthening tonnage list and very little activity to speak of. Therefore, it doesn’t come as a surprise that earnings have settled at fresh lows of USD 23,000 per day on TD25, well below last year’s average of about USD 40,000 per day for an ECO ship. In the North Sea, the list is very long with pretty much all charterers pushing their own ships in the region. Also, standout options remain in abundance among the usual players. We don’t expect much action with all the relets, but any cargo that does come should lead to significant declines in freight and earnings, which for now hover just shy of USD 30,000 per day for WC Norway/UKC”, Affinity concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide