Fearnleys Weekly Report

Fearnleys
Weekly Report

Week 33 - August 15, 2020





01

Tankers


VLCC

The VLCC market, as most other segments, is rapidly moving from a market place to a "money exchange". We are up to 80 MEG fixtures plus a few mystery disappearances for August, approaching the end game by the look of things. That leaves plenty of tonnage for charterers to continue moving cautiously, testing the W30 mark on modern ships for MEG/eastbound cargoes, and yielding little leftover lolly to speak of for the owning community. Although also under pressure, the Atlantic has produced a few fixtures from both West Africa and the US at rates contributing positive returns. However, with rates barely covering OPEX in the MEG - at best - owners will naturally be eyeing the western hemisphere more intensely. Thus, as loading dates move forward, it will likely not take long before that area becomes saturated too.


Suezmax

In the west we are still seeing decent activity on Suezmax, both in Wafr and Brazil. Unfortunately for Owners the tonnage list is still growing and this week we are counting almost 140 ships in wafr next 30 days. TD20 dropped to w45, and going forward it does not look very promising. Still cargoes left for 3rd decade, but not enough to help the market. In the MEG we are seeing the same old story that has been going on for many weeks now - too many ships and too little activity. VLCC's are slow, dragging the Suezmax down with them. We expect the market to remain stable below w50 going forward.


Aframax

Both in the North Sea/Baltic and Med/Bsea markets we have seen the trend go from flat at the end of last week to slightly firming this week. This has much to do with the increased activity out of the Baltic an Black Sea in the 3rd decade fixing window of August, which we are in at the time of writing. Fuel oil cargoes destined East of Suez have also played it’s part in putting the current upward pressure on rates. We still expect the market to pick up a few more points in the short run.


Rates

Dirty

(Spot WS)


Click rate to view graph

MEG/WEST

280'

21.5

0.0

MEG/Japan

280'

35.0

0.0

MEG/Singapore

280'

32.5

-2.5

WAF/FEAST

260'

38.0

0.0

WAF/USAC

130'

42.5

-7.5

Sidi Kerir/W Med

135'

50.0

-2.5

N. Arf/Euromed

80'

62.5

5.0

UK/Cont

80'

85.0

2.5

Caribs/USG

70'

72.5

-7.5


1 Year T/C

(USD/Day)


Click rate to view graph

VLCC

Modern

$36,500

$0

Suezmax

Modern

$22,500

-$500

Aframax

Modern

$18,500

$0


VLCCs


Click rate to view graph

Fixed in all areas last week

38

-11

Available in MEG next 30 days

157

3


1 Year T/C Crude

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02

Dry Bulk


Capesize

Spot again moving north for the big ships, on a combination of commodity trading fundamentals, crewing issues related to Covid-19 and expected effects of new Chinese customs procedures. Whilst iron ore trade volumes are at year-high and import stockpile quantities drop, supply of tonnage may be reduced as crew-changing becomes an ever more complicated task. Adding to this, dramatically increased time required for Chinese customs clearance may tie up a further massive number of ships. Far East levels are marginally down as only one major miner and a handful of operators picking ships for the west Australia/China conference trade, coming in at around USD 7.90-8.20 pmt depending on age/position. Picture is rapidly changing for the Brazil/China trade, where sentiment and fundamentals have brought levels from USD low 16's to more than USD 18.00 pmt in just a few days - further improvements expected. Paper levels follow suit, and increased period activity/pay apparent.


Panamax

The Panamax market is certainly firm in the Atlantic. The tonnage list is getting thinner day by day and we see higher rates for every day. However, it’s a bit two-sided story; for the shorter runs in the North Atlantic we have seen the 20’s being done for time charter. However, a “normal” TA run is actually being paid below the Baltic index 1a which at time of writing is at USD 19k. In the eastern hemisphere we also experience firming rates, but the trading has been slower mid week. There are still some August stems out of Aussie to be covered and rates are hovering around USD 14-15k bss China delivery.


Supramax

Firm market across the Atlantic with activity stronger in the Bsea. Thin tonnage list on the Continent, leading to pressure on rates. The Far Eastern market is more moderate and flat. From USG fh paying mid 20's and high teens for TA. Black sea market pushing hard where backhaul to USG is paying USD 10000, Wafr trip around USD 17000 and fh roughly USD 24000. In the Indian Ocean, Safr/Feast concluding in the around USD 12500+250k gbb and WCI to Seasia via Ag, around USD 12000. In the Feast more moderate levels are discussed CIS rv back to China mid USD 6000 and Nopac rv around USD 8000.


Rates

Capesize

(USD/Day, USD/Tonne)


Click rate to view graph

TCE Cont/Far East

180'

$35,200

$25

Australia/China

$8.4

-$0.0

Pacific RV

$21,896

-$354


Panamax

(USD/Day, USD/Tonne)


Click rate to view graph

Transatlantic RV

$20,450

$4,300

TCE Cont/Far East

$27,136

$3,331

TCE Far East/Cont

$4,674

$514

TCE Far East RV

$14,552

$1,177


Supramax

(USD/Day)


Click rate to view graph

Atlantic RV

$13,306

$606

Pacific RV

$8,686

$561

TCE Cont/Far East

$24,921

$3,064


1 Year T/C

(USD/Day)


Click rate to view graph

Newcastlemax

208'

$17,750

$500

Kamsarmax

82'

$12,000

$500

Ultramax

64'

$11,000

$0

Capesize

180'

$16,000

$500

Panamax

75'

$10,500

$500

Supramax

58'

$9,750

$0


Baltic Dry Index (BDI)

$1,595



1 Year T/C Dry Bulk

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03

Gas


Chartering

ANNOUNCEMENT:
Libra Fearnley Energy is please to announce Mr Scott Gray will join as a cargo broker starting Sept 17th,2020. After 35 years experience in the LPG market at ICIS, The Waterborne Report and most recently IHS , we are very excited to have Scott bring his extensive contacts and experience to our team. Scott will work out of our Houston office located at 1 Riverway , Suite 1810 Houston Texas 77056 and is contactable at his direct line of + 1 713 403 2547 and mobile + 1 713 824 0252.

--

WEST:
Despite a fair few options with regards to spot FOB cargoes in 1H Sep, freight activity West of Suez has been relatively limited so far this week. Charterers seem to be between a rock and a hard place: on one hand, Owners’ ideas remain strong at around mid $90s Houston/Chiba. On the other, current arb economics and a persistently weak Ginga window mean September liftings are not especially appealing. This dynamic has all market participants primed for news of cancellations ex US, although so far it seems some players have preferred to defer to later in September than to cancel altogether.

EAST:
The week got off to a quiet start in the East with public holidays both in Singapore and Japan on Monday. But as soon as people returned to their offices we saw increased activity on shipping for 1st decade of September, which was mainly triggered by the announcement of the Adnoc acceptances earlier. Last done levels are now around low/mid usd 60s Baltic, and the general sentiment going forward is that Baltic should come off slightly as there is currently more supply of spot open tonnages. However, we are still awaiting the acceptances from Aramco which could potentially create more demand for shipping from Indian majors (along with other lifters). If a larger part of these cargos were to be allocated towards the front end of the month that could help to maintain the levels we are seeing today.


LPG Rates

Spot Market

(USD/Month)


Click rate to view graph

VLGC

84'

$1,550,000

-$50,000

LGC

60'

$750,000

$100,000

MGC

38'

$700,000

$0

HDY SR

20-22'

$690,000

$0

HDY ETH

17-22'

$730,000

$0

ETH

8-12'

$390,000

$0

SR

6.5'

$300,000

$0

COASTER Asia

$250,000

$0

COASTER Europe

$140,000

$0


LPG/FOB Prices - Propane

(USD/Tonne)


Click rate to view graph

FOB North Sea/Ansi

$275

$0

Saudi Arabia/CP

$365

$0

MT Belvieu (US Gulf)

$263

-$1

Sonatrach/Bethioua

$285

$0


LPG/FOB Prices - Butane

(USD/Tonne)


Click rate to view graph

FOB North Sea/Ansi

$286

$0

Saudi Arabia/CP

$345

$0

MT Belvieu (US Gulf)

$227

$16

Sonatrach/Bethioua

$310

$0


LNG Rates

Spot Market

(USD/Month)


Click rate to view graph

East of Suez 155-165k CBM

$35,000

$1,000

West of Suez 155-165k cbm

$40,000

$1,000

1 Year T/C 155-165k TFDE

$44,000

$0





04

Newbuilding


Activity Levels

Tankers

Slow

Dry Bulkers

Slow

Others

Slow


Prices

(Million USD)

VLCC

300'

$87

$0

Suezmax

150'

$57

$0

Aframax

110'

$47

$0

Product

50'

$35

$0

Newcastlemax

210'

$48

$0

Kamsarmax

82'

$27

$0

Ultramax

64'

$25

$0

LNGC (MEGI) (cbm)

170'

$180

$0





05

Sale & Purchase


Prices

Dry 5 yr old 10 yr old
Capesize $37.0 $22.0
Kamsarmax $21.0 $14.5
Ultramax $20.5 $11.0
Wet 5 yr old 10 yr old
VLCC $70.0 $49.0
Suezmax $47.5 $34.0
Aframax/LR2 $38.0 $27.0




06

Market Brief


Exchange Rates

USD/JPY

106.46

0.57

USD/NOK

8.90

-0.15

USD/KRW

1184.55

-0.10

EUR/USD

1.18

0.00


Interest Rates

LIBOR USD (6 month)

0.34%

0.01%

NIBOR NOK (6 month)

0.37%

0.00%


Commodity Prices

Brent Spot

$45.00

$0.00


Bunker Prices

Singapore

380 CST

$287

$7

MGO

$390

$4

Spread MGO/380 CST

$103

-$3


Rotterdam

380 CST

$267

$1

MGO

$370

-$2

Spread MGO/380 CST

$103

-$3


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