WEEK 26 MARKET REPORT

VLCC
It proved a busier period on the VLCC front with the Middle East compiling twice as many fixtures compared to last week. This increased activity on the back of last week's already firming market led to further increases to start off, but as the week progressed the long list of outstanding cargoes grew considerably shorter; the influx of cargoes that begun as a full flow, quickly slowed to a trickle. This diminishing inquiry took some steam out of the Owner's bullish tone, leading to conference rates being established and the market returning to a standoff. Owners continue to hold on to current levels, hoping the expected July inquiry that has yet to come will manifest in an active week ahead. Charterers, on the other hand look to use the current inactivity to their advantage; with fewer opportunities leaving Owner's little choice but to fix at or below last done. Activity, or lack there of will determine which side prevails.

As mentioned above it was a busier week with a total of 33 fixtures reported; 25 emanating from the Middle East and 8 from the Atlantic Basin. The former was dominated by eastbound business which was responsible for all but 3 fixtures with China discharges leading the way accounting for almost half of the 22 eastbound fixtures. Double hulls started the week at the ws50 level and quickly moved up five points, establishing the "conference rate" of ws55 which was repeated five times. The single hulls followed a similar trend moving from the low to mid ws40's, continuing to trade in that band pending on age and approvals. The 3 westbound fixtures that were concluded were all for shorter haul business, two voyages to the Red Sea at ws42 on a single and ws59 on a double and one voyage to South Africa at ws47.5 which done earlier in the week. The longer haul business was largely inactive with rates arguably holding at the ws35 level.

Suezmax
Despite an active start to the week which saw the market find its way to the mid/high ws80s, the market slowed on the back of a lack of enquiry from mid-week causing rates to deflate to the mid-ws70s by week's end.

Aframax
A highly active Mediterranean market drove up owners' sentiment across the board during the first half of the week, with the CBS market 'psychologically' rising to the ws92.5 level despite the prevailing reality of excess supply. Once the Mediterranean market began to lose steam, the idea of ballasting over in hopes of higher rates lost credibility and with charterers demonstrating their patience, enquiry remained low prompting rates to ease to the low ws80s by week's end.

Panamax
The European Panamax markets were active this week, with rates pushing upward from ws115 to ws120 levels with steady enquiry for Panamaxes thanks to a thinning MR positions list. Rates seem poised to hold steady next week as the Aframax momentum in the Mediterranean has subsided and rates came off accordingly, which should ease pressure on the Panamaxes as well.

With the level of activity seen in the European market - which attracted tonnage from the US Atlantic Coast, rates in the Caribbean were able to hold steady despite the lighter activity for CBS-USAC-G cargoes. Rates held at the ws112.5 level for the few concluded fixtures whilst more fuel oil enquiry from the Canadian East Coast, with a fuel oil tender awarded to Trafigura for delivery to Campana. Next week may result in upward pressure as Friday is closed in observation of the US Independence Day, which may prompt charterers to come to market early to complete business ahead of the long weekend. That notwithstanding, should the Aframax markets continue to ease downwards, they could become the cheaper alternative.

Rates held steady in Ecuador this week at the ws127.5 level on the back of lighter enquiry.

Products
The surprise winning market of the week is surely Cont/States. Opening on the back of last weeks 37x77.5 fixture, the market was not expected to do much of anything, but as the week progressed, several Owners drew a line, saying rates of w85 or less simply didn't return enough to justify fixing a cargo, and short of higher rates, they would anchor instead. While the suggestion by three or four Owners certainly isn't enough to change the direction of a market in the way we saw this week, it is certainly a part of the equation. By weeks end, ships have been reported fixed at levels up around 37x100.

Caribs/Upcoast and USG/Europe, on the other hand, managed to go absolutely nowhere. The Caribs/Upcoast market moved sideways all week long, solidly at 38x77.5. The backhaul market into Europe bounced around in the w50's all week. As an average, we can call it 38x55, although there were deals reported slightly above and below as well.