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MARKET REPORT - WEEK 34
VLCC
It was another lackluster week on the VLCC front as Eastbound
rates continued their downward slide, sagging below the psychological
barrier of ws50 which many owners hoped would not be crossed.
As charterers continued to trickle September stems into the
market, these cargoes were met with more than ample tonnage,
leaving charterers with plenty of choices. This lackluster
trend appears set to continue in the short term as the list
of available tonnage is simply too great relative to the number
of cargoes. With little now remaining in their arsenal, the
only alternative to present rates for owners is to simply
drop anchor and wait for better days. Those owners who are
not already anchored in waiting can slow steam as waiting
time is inexpensive, but the affect on the market of such
a tactic at this point in time is largely negligible.
We
report 29 fixtures for the week; 20 emanating from the MEG
and 9 in the Atlantic basin. Of the 20 MEG fixtures, just
one - to the UKC - was for West discharge. The MEG-East market
was led by fixtures bound for China and South Korea, with
7 and 6 such fixtures, respectively. Eastbound rates commenced
in the low ws50s but quickly fell to the ws49 level where
they have remained for the remainder of the week. The one
Westbound fixture reported this week was at the ws38.5 level,
a touch above the present assessment of ws37.5.
Looking
ahead to next week, the expectation is that rates will hold
as owners point to lack of incentive at levels much lower
to assume the voyage, save for those vessels which need to
reposition. With the August program now complete at 103 fixtures
(well below the 113 completed in July), the concentration
is on first half September stems where we expect a monthly
total in line with this year's average of 105. As charterers
continue to progress into their September programs, 42 cargoes
have already been covered, leaving perhaps another 27 cargoes
through the first two decades of the month. With 60 units
(48 double hull) projected to be load ready through the same
space of time, the imbalance is apparent. The question now
is how much lower will rates fall, or a better question where
will Owners draw the line in the sand? As we are quickly approaching
levels where it makes more sense for Owners to sit.
With
9 fixtures in the Atlantic Basin it proved a rather busy week,
especially considering that the falling Suezmax basically
took the VLCCs out of play. The one westbound fixture we did
see was earlier in the week at ws52.5, and with the Suezmax
rate at ws65, VLCCs will have to be lower to come back into
play. Although the list of available units is not too overly
populated, ballasters from the east will come to the region
due to the falling eastern sector, putting further downward
pressure on rates.
Suezmax
The Atlantic Suezmax market lost a bit of ground this week
as tonnage remains in excess of demand. Having commenced in
the low ws70s, the market concluded in the high ws60s. With
rates appearing to have found their floor, we expect rates
to hold stead for now.
Aframax
The Caribbean Aframax market commenced the week in the low
ws110s. A brief flurry of inquiry at mid-week saw rates rise
to ws120, but the gains were quickly evaporated and the market
concluded at the ws110 level. We expect rates to hover at
this level at the start to the week ahead.
Panamax
The Caribbean Panamax market was marked this week by ample
available tonnage as evidenced by the fact that one charterer
was able to achieve last done levels on a prompt replacement
fixture. Rates were generally flat at the ws120 level.
The
trans-Atlantic market was extremely quiet and rates were only
tested once with charterers able to achieve rates at the ws125
level for a Med/USG cargo. With the quiet on both sides of
the Atlantic, we expect that rates will hold steady.
The
Ecuador market was flat with light enquiry. Rates held at
ws160.
CPP
A flat week describes the Atlantic Basin clean for the last
full week
of August. Even with European bank holiday and impending three-day
Labor Day holiday weekend in the U.S., there was no rush to
fix ships. Charterers had their pick of positions on all fronts.
TC2 remained in the low ws130s with a couple fixtures breaking
that level, with most Owners just cutting to the chase and
getting on with it. The same story prevailed in the Caribbean
and US Gulf this week, quick fixtures at flat levels to keep
the ships moving.
TC2
finished the week just shy of the ws135 mark, while TC3 was
still a soft ws125. We look forward to seeing if there will
be any changes next week as charterers look forward deeper
into September laycans and more participants return from end-summer
holidays.
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