Fearnleys Weekly Report

Fearnleys
Weekly Report

Week 24 - June 18, 2021





01

Tankers


VLCC

It was another quiet week on the surface, as charterers continue their clandestine approach. Mysteries remain as fixtures lacking details are reported on the market. Interestingly, we are up to 115 fixtures in the MEG for June by our count (the best month since December 2020), and when the dust settles, it may even be a little higher. However, at the time of writing we are in the twilight zone between the June and July stems, so a quieter period is expected. There remain positive noises from OPEC for increasing volumes month on month through to September, so this will bring cheer to the owning community. However, a lackluster Atlantic market remains a concern and the issue of higher oil prices and therefore refueling costs ramping up to USD 530 in Singapore, owners bottom lines will remain teetering between red and black.


Suezmax

It's taken weeks for the market to suss it out, but finally some participants have woken up to the fact that there is more fixing going on than meets the eye. This has not been helped of course by certain owners failing to denote if their ship is on subjects or not, which beggars belief in an OTC market, where the primary rate-mover is supply and demand. The Atlantic has a firmer feel with one charterer forced to pay ws60 for a Wafr/Oz run as owners are shunning long-haul runs unless recompensed. Firmer bunkers are also playing their part but there is general resistance. This will help imbue owners with a degree of optimism which will likely see Td20 touch ws50'ish. This has been complimented in the East where Td23 has just traded at ws30, which may nudge rates for MEG/East into the high ws50's.


Aframax

This week we had more of the same in the Nsea/Baltic markets with rates hovering around bottom levels. However, activity has picked up a bit, but the excess supply of vessels still give charterers the upper hand securing cheap freight. Although, we expect rates to move in a slightly upward direction as owners putting on some pressure as end June’s dates are being worked and July schedule still to come.
The situation is rather similar in the Med/Bsea where the supply of vessels is higher than cargo activity demands. This has resulted in rates coming off again since last week as expected, and the market trend is again soft. We expect the market to continue trading sideways going into next week.


Rates

Dirty

(Spot WS 2021, Daily Change)


Click rate to view graph

MEG/WEST

280'

18.0

0.0

MEG/Japan

280'

31.0

-4.5

MEG/Singapore

280'

31.0

-1.0

WAF/FEAST

260'

32.5

0.0

WAF/USAC

130'

47.5

2.5

Sidi Kerir/W Med

135'

55.0

2.5

N. Arf/Euromed

80'

87.5

0.0

UK/Cont

80'

92.5

2.5

Caribs/USG

70'

80.0

2.5


1 Year T/C

(USD/Day, Weekly Change)


Click rate to view graph

VLCC

Modern

$30,000

$0

Suezmax

Modern

$16,500

$0

Aframax

Modern

$16,000

$0


VLCCs


Click rate to view graph

Fixed in all areas last week

50

-10

Available in MEG next 30 days

161

-10


1 Year T/C Crude

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02

Dry Bulk


Capesize

Bull mood continues with modest but significant daily gains on very robust fundamentals and positive outlook for commodities. Average daily earnings up some 60 pct w-o-w, coming in at tick over USD 33k/day. All areas living up to expectations, with the Atlantic being the brightest spot - transatlantic short trades approaching USD 50k/day. Brazil/China iron ore trade picking up speed, with voyage rates for July heading for USD 30 pmt and 100-days China-Brazil-China rounds improving almost 70 pct in value to stand at more than USD 32k/day. West Aussie/China volumes steady, short Pacific rounds still yielding better than general market, at USD 35-36k/day. Little done, but considerable period interest from main players, with focus on index-linked structures.


Panamax

The Pananax market has experienced big gains in both hemispheres this week. P1A is currently trading at 30k+ while the Pacific rounds are being priced at 31k.
We see the period market continuing to gain, both volume- and rate wise. FFA’s are continuing to give support and we do believe this trend will continue, at least short term.


Supramax

Supramax Index pushing close to USD 29,000 with everyday gains of a few hundred dollars up. The Atlantic basin is stronger compared to Pacific, which is driven by the strong ECSA and USG soybean and corn export season. The Med and Continent markets with the same upward trend as other Atlantic areas. Stronger demand in the Persian Gulf and India continues. Overall rates are strong. Pacific has also shown more resistance with prompt tonnage clearing out.
Indonesian trips into India were reported at the level of USD 25,000 pd.
South African trips to the Far East were fixed around USD 20,000 pd plus ballast bonus at the USD 1 mill, which is very similar to ECSA fronthaul rates.


Rates

Capesize

(USD/Day, USD/Tonne, Daily Change)


Click rate to view graph

TCE Cont/Far East

180'

$54,900

$2,050

Australia/China

$12.6

$0.2

Pacific RV

$36,250

$950


Panamax

(USD/Day, USD/Tonne, Daily Change)


Click rate to view graph

Transatlantic RV

$31,300

$300

TCE Cont/Far East

$43,091

$282

TCE Far East/Cont

$17,156

$705

TCE Far East RV

$32,855

$554


Supramax

(USD/Day)


Click rate to view graph

Atlantic RV

$32,358

$2,748

Pacific RV

$28,814

$2,035

TCE Cont/Far East

$36,993

$3,818


1 Year T/C

(USD/Day, Weekly Change)


Click rate to view graph

Newcastlemax

208'

$35,000

$3,000

Kamsarmax

82'

$27,000

$2,750

Ultramax

64'

$27,000

$2,000

Capesize

180'

$30,000

$3,000

Panamax

75'

$25,000

$2,750

Supramax

58'

$24,000

$2,000


Baltic Dry Index (BDI)

3267



1 Year T/C Dry Bulk

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03

Gas


Chartering

EAST
The focus has mainly been on the Western market this week with a few exceptions. A couple of trader relets were taken out in the AG rep low usd 40s, but since then we saw another Charterer having to pay a premium for a short t/c for Indian trade. The general feeling is that freight market may have reached a bottom, for now, as more ships are expected to be sent back West on the back of improved arb economics. But at the same time we are still seeing less exports from the Middle East, and Aramco are reported to have cut several cargos in July due to production issues. This certainly needs to improve as well going forward, in order for sentiment on freight to change in the East.

WEST
The West market has been very busy since last time this report was published. Several fixtures have been concluded close to the USD 80 mark for laycans spread out during the second and third decades of July and yesterday the momentum changed a bit and rates started ticking slightly upwards. The position list for July is not really tight just yet, however, there are considerably less vessels available compared to a week ago. We expect more vessels to get tucked away during the course of this week and market to tighten accordingly.


LPG Rates

Spot Market

(USD/Month, Weekly Change)


Click rate to view graph

VLGC

84'

$950,000

$50,000

LGC

60'

$850,000

$0

MGC

38'

$800,000

$0

HDY SR

20-22'

$650,000

$0

HDY ETH

17-22'

$750,000

$0

ETH

8-12'

$465,000

$0

SR

6.5'

$390,000

-$10,000

COASTER Asia

$265,000

$5,000

COASTER Europe

$250,000

$0


LPG/FOB Prices - Propane

(USD/Tonne, Weekly Change)


Click rate to view graph

FOB North Sea/Ansi

$479

$0

Saudi Arabia/CP

$530

$0

MT Belvieu (US Gulf)

$502

$15

Sonatrach/Bethioua

$495

$0


LPG/FOB Prices - Butane

(USD/Tonne, Weekly Change)


Click rate to view graph

FOB North Sea/Ansi

$461

$0

Saudi Arabia/CP

$525

$0

MT Belvieu (US Gulf)

$472

$9

Sonatrach/Bethioua

$495

$0


LNG Rates

Spot Market

(USD/Day, Weekly Change)


Click rate to view graph

East of Suez 155-165k CBM

$58,000

$500

West of Suez 155-165k CBM

$72,000

$10,000

1 Year T/C 155-165k TFDE

$79,000

$1,000





04

Newbuilding


Activity Levels

Tankers

Increasing

Dry Bulkers

Increasing

Others

Increasing


Prices

(Million USD, Weekly Change)

VLCC

300'

$96

$0

Suezmax

150'

$65

$0

Aframax

110'

$54

$0

Product

50'

$38

$0

Newcastlemax

210'

$58

$0

Kamsarmax

82'

$31

$0

Ultramax

64'

$29

$0

LNGC (MEGI) (cbm)

170'

$193

$0





05

Sale & Purchase


Prices

Dry 5 yr old 10 yr old
Capesize $42.0 $30.5
Kamsarmax $28.0 $21.0
Ultramax $26.0 $20.0
Wet 5 yr old 10 yr old
VLCC $70.0 $52.0
Suezmax $48.0 $33.0
Aframax/LR2 $41.0 $25.0




06

Market Brief


Exchange Rates

(Daily Change)

USD/JPY

110.23

0.46

USD/NOK

8.50

0.16

USD/KRW

1130.40

19.65

EUR/USD

1.19

-0.02


Interest Rates

(Daily Change)

LIBOR USD (6 month)

0.16%

0.01%

NIBOR NOK (6 month)

0.70%

0.34%


Commodity Prices

(Daily Change)

Brent Spot

$73.00

$0.00


Bunker Prices

(Daily Change)

Singapore

380 CST

$422

$15

MGO

$599

$11

Spread MGO/380 CST

$177

-$4


Rotterdam

380 CST

$411

$15

MGO

$585

$7

Spread MGO/380 CST

$174

-$8


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