A week with much promise for owners. Rumours and counter rumours of successive higher rates reported, but little actually confirmed at the time of writing. A busy Atlantic is attracting modern ballasters from the East and a busy looking October MEG program is encouraging many to stay in that region. Owners face the decision of fixing long and booking in much their winter market now, or staying shorter for two bites at the cherry. Most are agreed we will see higher numbers in the short term, but markets move in steps and thus far MEG/China remains in the mid-high WS 30’s with owners looking to push for WS 40. West Africa to China is already past the WS 40 level, and with more enquiry in the USG and UKC, we are likely heading up from here too. The UKC-East arb is open and there remains demand for the sweet crudes in the East.

A firmer VLCC market is likely to feed into Suezmax's at some point as owners look to recoup losses and buck recent historical lows. Simply counting ships versus cargoes may catch some participants by surprise, because as we start to hunt down the fourth quarter, you have to add "expectation" into the algorithm, which hasn't necessarily formed part of the market playbook during the last year. Another vital ingredient, MEG Suezmax enquiry, has made a return, with ships disappearing in bulk and thus handing owners additional options, as opposed to default ballasting on spec' to West Africa. Td23 has fixed a wadge of relets at WS 25, but this number is likely to uptick. MEG/East will threaten the WS 60 lvl within the next week whilst Td20 owners will be pushing for mid 50's.

Another week in the Nsea/Baltic Aframax market with rates remaining at bottom levels. Even with some prompt replacement jobs, rates didn’t move upwards as charterers had plenty of tonnage to choose from. However, with the preliminary Urals schedule for October looking a bit more promising, owners have higher expectations going forward. But we expect rates to move sideways for the current fixing window before we will get a clearer picture of the direction for the rest of October.
Much the same can be said about the Med/Bsea region where we still see charterers quietly taking out ships off market at repeat levels. This will most likely continue as long as we can count a dozen or more ships prompt open and free of cargo in the area. We expect the market to continue moving sideways at these levels in the week to come.

It has been an exciting week for the Capesize segment as there is a very limited amount of available tonnage to meet the continuing health volume of cargoes. Especially the rout from West Australia to China with iron ore has increased significantly, now 22% higher than it was a week ago. This obvious strengthened the already positive sentiment, pushing the average of all routes up by 12%, which now being almost USD 60,000 per day earnings. The coming days and weeks look to be very interesting as the Pacific seems to drain most vessels opening, meaning there is a very limited number of vessels heading for Brazil and Atlantic. That said, it’s expected to be more available tonnage going forward which probably will calm down the market a bit, but the market floor continuously increase.

With holidays in China this week, the activity has come down, but it is still a firm underlying tone in general. In the Atlantic, we still see a good demand for minerals and a well-balanced tonnage book. P1A is currently trading in the region of USD 37k.
In the eastern hemisphere, Indo rounds are being traded at similar levels i.e. 36/37k, while several candidates have been fixed retro SE Asia for trips via Black Sea or USG back to Asia.

Slow start of the week mainly due to the holidays in Asia with high volatility on FFA trading, but it all subsided to flat and unexcited market across the borders at the time of writing. Rates from Med to West Africa reaching USD 40,000 pd. Continent is tight on tonnage with grain cargo to Med paying USD 45,000 pd and slightly less on fertiliser run from Continent to ECSA. USG been lacking action with natural disaster disturbances. Building up tonnage last few weeks had a negative effect on the rates, however the situation is starting to look better and rates have improved for all directions. TA paying mid USD 30,000 pd and FH above USD 45,000 pd. ECSA is well supported rates from Santos to Far East was paid on Ultra USD 28,000 plus 1.8 mil GBB. Asia and Indian Ocean market remain stable with rates as per “last done” and some premium. Young Harmony (63,567 dwt, 2014) open Koh Sichang 24/28 Sep trip via Indonesia redel Thailand USD 41,000 pd. On period market owners asking mid/high USD 30,000 pd for 6-8 months and low USD 30,000 pd for 9-11 months.

EAST
The East market is still lagging behind the West in terms of earnings. Activity levels is picking up however and we now start to see a few deals in the Middle East. An Indian PSU spot tender is due today and there is already some chatter about a few more similar upcoming tender quotes. As of now, there’s ample supply of competitive relets available in the MEG and it seems like freight is set to remain at a discount to the West for time being.

WEST
After last week's fixing activity ex the US, there are few owner controlled vessels left for October dates. Throughout the week we have, however, seen a handful of relets emerging within the third decade of October. In combination with a tight arb this puts a damper to any sudden increase in freight rates. A couple of deals has been concluded this week just shy of USD 85 Houston/Chiba basis. According to our data, we anticipate more than a handful deals yet to be concluded in US off October dates.