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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.
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