Fearnleys Weekly Report

Fearnleys
Weekly Report

Week 22 - May 28, 2020





01

Tankers


VLCC

With increased demand China is sourcing more and more supply from the Atlantic to replace lost Middle East cargoes, adding to ton mile and thinning the MEG position list. Add to that a delayed start to the June program, with corresponding compressed activity, and the VLCC market was rigged for an uptick. Having bottomed out in the very high WS 40’s for the benchmark MEG/East route, rates have since shot up. Last done at time of writing is a WS 64.5 paid for a MEG/China run, and WS 62.5 from West Africa for same destination. Arguably increased bunker prices are capping some of the gains, but sentiment is a strong driver and with a number of uncovered cargoes, remaining rates could easily continue to tick up.


Suezmax

Similar to last week, Suezmaxes are struggling all over, with no place to hide at the moment. Owners prefer to fix short voyages, or wait it out. The tonnage list in the Atlantic is long, but not hopeless. In the East on the other hand, it looks terrible. Two weeks of almost no activity has built up a list we have not seen in quite some time. A 30-day count in the MEG shows 141 ships on paper, which will make most owners give in. Until today it has been difficult to find any positive signs at all, but things have started happening with VLCC activity and rates moving in the right direction, which should spill over into the Suezmax segment. Additionally, we now see some movement in Libya as well. It remains to be seen if this is sustainable, but getting Libya barrels back in play would be a huge plus.


Aframax

In the North Sea and Baltic market, we have seen a significant downward correction on rates. Mainly due to lack of activity and even relets are now competing over the few available market cargoes. In the week to come, we expect rate levels to dip further and then hover around bottom levels in the short run with no immediate signs of recovery just yet. The Mediterranean and Black Sea market has more or less moved sideways the past week as prompt ships pile up in the area and little activity from charterers has made it difficult for owners to revive an upward pressure on rates. At the time of writing, a cross-Med voyage currently pays just above WS 80 giving owners a TCE return of around USD 15,000 per day. One to follow going forwards is if any development arises in crude oil activity from Libya.


Rates

Dirty

(Spot WS)


Click rate to view graph

MEG/WEST

280'

35.0

2.0

MEG/Japan

280'

65.0

7.5

MEG/Singapore

280'

67.5

9.5

WAF/FEAST

260'

62.5

7.5

WAF/USAC

130'

67.5

-2.5

Sidi Kerir/W Med

135'

65.0

-10.0

N. Arf/Euromed

80'

82.5

-5.0

UK/Cont

80'

95.0

-30.0

Caribs/USG

70'

90.0

-25.0


1 Year T/C

(USD/Day)


Click rate to view graph

VLCC

Modern

$77,500

-$2,500

Suezmax

Modern

$31,500

-$6,000

Aframax

Modern

$26,000

-$1,500


VLCCs


Click rate to view graph

Fixed in all areas last week

62

6

Available in MEG next 30 days

101

-7


1 Year T/C Crude

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02

Dry Bulk


Capesize

After last week’s «push», the market started to slide prior the long weekend for UK and Singapore and continued so this week. Week on week the Australia-China iron ore route is down by 10% and the average time charter route down by 4%. The Brazil-China route has been very quiet and value more or less the same as last week, however sentiment is also negative for this trade. There has been some period activity, but on index linked structures as owners hardly see it as a good timing to go for fixed priced.


Panamax

The Panamax market has seen a very quiet start to the week with holidays end of last week and the start of this. Although we’ve seen some rate increase it is a flat tendency with more cargoes in the market, but the list of available tonnage is still outnumbering the requirements. TA’s are now fetching excess 6,000 while fronthauls are being fixed in region 11,000-12,000. In the Pacific, rounds are being fixed in region 6/7,000 depending delivery and duration.


Supramax

Another positive week for the Supramax market with Baltic Index climbing slowly upwards. Though activity was somehow disrupted to the widespread holidays. South East Asia and India have seen good gains in the rates. 63,000 dwt was fixed from EC India to China with iron ore at USD 13,000 pd. Another Ultramax delivery Vietnam was fixed at USD 9,500 pd for a trip via ECI to China. The Pacific market gained premium as well, and owners were able to obtain around USD 1,000 premium compared to last week’s rates. The Continent and Mediterranean markets was comparably quiet again due to the holidays across Europe. Owners increased their rates for FH asking USD 12,000 for trips to India and Far East. USG still suffers lack of cargoes, and 63,000 dwt was fixed at USD 9,000 pd from USEC to China. ECSA see slightly better returns with rates about USD 11,000 pd plus USD 110,000 GBB Ultramax.


Rates

Capesize

(USD/Day, USD/Tonne)


Click rate to view graph

TCE Cont/Far East

180'

$15,320

$1,610

Australia/China

$4.3

-$0.4

Pacific RV

$5,488

-$1,117


Panamax

(USD/Day, USD/Tonne)


Click rate to view graph

Transatlantic RV

$2,255

$250

TCE Cont/Far East

$11,582

$593

TCE Far East/Cont

$1,388

$149

TCE Far East RV

$6,973

$768


Supramax

(USD/Day)


Click rate to view graph

Atlantic RV

$3,758

-$65

Pacific RV

$6,214

$635

TCE Cont/Far East

$12,086

-$357


1 Year T/C

(USD/Day)


Click rate to view graph

Newcastlemax

208'

$13,500

$0

Kamsarmax

82'

$9,500

$250

Ultramax

64'

$10,000

$0

Capesize

180'

$11,500

$0

Panamax

75'

$8,250

$250

Supramax

58'

$8,500

$0


Baltic Dry Index (BDI)

$502



1 Year T/C Dry Bulk

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03

Gas


Chartering

EAST
The week got off to a quiet start with several countries on public holiday on Monday. But since then we have seen a few ships being fixed away for 2nd decade June loading in the Middle East. All of these deals have been reported in the lower USD 30s Baltic, and with a continuous lengthy list of available ships in the East, freight rates will continue to be under pressure. As this trend seem set to continue for current and next fixing window, some owners have decided to send more ships back West via Cape hoping for better freight returns there. Meanwhile, there are talks of a few more uncovered cargos from Indian majors during mid and 2nd half of June, but time of writing it remains to be seen how many of these that can actually be firmed up.

WEST
Activity at the start of this week has been limited, with most of the West having a public holiday on Monday. A handful of fixtures and FOB transactions has meant that the positions list is a little bit shorter than it was, but it remains on the long side with a combination of owner-controlled ships and trader relets available throughout June. There is still a slightly bearish sentiment as a consequence.

Some charterers will be waiting for the release of US stats tomorrow before making any further decisions on freight. However, given freight length and the fact that inquiries are still focused on June even though we are nearly over with May, it might be that charterers will remain relaxed and could wait until laycans are even more prompt.


LPG Rates

Spot Market

(USD/Month)


Click rate to view graph

VLGC

84'

$700,000

-$50,000

LGC

60'

$850,000

$0

MGC

38'

$735,000

-$40,000

HDY SR

20-22'

$630,000

$30,000

HDY ETH

17-22'

$730,000

$30,000

ETH

8-12'

$410,000

$0

SR

6.5'

$340,000

$0

COASTER Asia

$245,000

$0

COASTER Europe

$190,000

$0


LPG/FOB Prices - Propane

(USD/Tonne)


Click rate to view graph

FOB North Sea/Ansi

$200

$0

Saudi Arabia/CP

$340

$0

MT Belvieu (US Gulf)

$237

-$1

Sonatrach/Bethioua

$210

$0


LPG/FOB Prices - Butane

(USD/Tonne)


Click rate to view graph

FOB North Sea/Ansi

$136

$0

Saudi Arabia/CP

$340

$0

MT Belvieu (US Gulf)

$206

-$3

Sonatrach/Bethioua

$195

$0


LNG Rates

Spot Market

(USD/Month)


Click rate to view graph

East of Suez 155-165k CBM

$30,000

$0

West of Suez 155-165k cbm

$32,000

-$1,000

1 Year T/C 155-165k TFDE

$43,000

$0





04

Newbuilding


Activity Levels

Tankers

Slow

Dry Bulkers

Slow

Others

Slow


Prices

(Million USD)

VLCC

300'

$90

-$1

Suezmax

150'

$60

-$1

Aframax

110'

$49

-$1

Product

50'

$36

-$1

Newcastlemax

210'

$50

-$1

Kamsarmax

82'

$28

-$1

Ultramax

64'

$26

-$1

LNGC (MEGI) (cbm)

170'

$184

-$5





05

Sale & Purchase


Prices

Dry 5 yr old 10 yr old
Capesize $35.0 $20.0
Kamsarmax $21.0 $14.5
Ultramax $20.0 $11.5
Wet 5 yr old 10 yr old
VLCC $72.0 $50.0
Suezmax $50.0 $35.0
Aframax/LR2 $40.0 $28.0




06

Market Brief


Exchange Rates

USD/JPY

107.60

0.16

USD/NOK

9.88

-0.02

USD/KRW

1234.30

4.00

EUR/USD

1.10

0.00


Interest Rates

LIBOR USD (6 month)

0.57%

-0.02%

LIBOR NOK (6 month)

0.39%

0.00%


Commodity Prices

Brent Spot

$34.50

-$0.50


Bunker Prices

Singapore

380 CST

$216

$5

MGO

$311

$14

Spread MGO/380 CST

$95

$10


Rotterdam

380 CST

$201

$10

MGO

$287

$14

Spread MGO/380 CST

$86

$4


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