Although a softer bias persists in the VLCC market, the owning community hasn't rolled over in defeat just yet. The focus so far has been on a re-surge of activity in the Atlantic, where fixtures concluded have been better than what could've been expected, and a number of charterers/traders remain exposed. The quick re-balancing in the oil market has taken most by surprise. The following price jump is a result of factories across Asia’s largest economy restarting and people return to work, with some favouring their cars over taking public transport. Crude processing at China’s independent refineries is now higher than pre-virus levels, while fuel demand is also starting to rebound in India. MEG production cuts, and corresponding price hikes, has turned Asian buyers’ attention back to the Atlantic for alternative- and for some a more favoured supply. A couple of MEG players have dipped their feet in and had a stab the more vintage end of the market, but still facing rates in the ws50'ies - albeit at the lower end of the scale.

As we have mentioned for some weeks now, the Suezmax market has reached the top, and we have been waiting for the activity to slow down, and lists to grow. And boy, it did. At the beginning of the week we had one outstanding cargo worldwide for Suezmaxes. Owners shaking their head in disbelief, not understanding what’s happening. Well, it’s not like this has not happened before! We are back to what we can call a normal market. The last 6-7 months, market has picked itself up immediately after a dip, but not this time I’m afraid. It will of course come back, but this will take a bit more time. Tonnage list in the East is long, and will keep growing. West is looking a bit better but with very little activity, owners will start looking for the big red panic button. For now, unfortunately it looks soft going forward, only thing we could hope for is for some reason activity will start picking up again.

As expected, rates in the North Sea and Baltic increased on the back of a tight window due to limited tonnage supply for the 24-27th of May loading window. However, moving into the end/early fixing window we expect rates to soften as more tonnage becomes available and as relets will come back into play again there will be less cargoes to fix in the market.
In the Mediterranean and Black Sea market, the rates have taken a solid downwards correction this week with benchmark routes falling 30-40 ws points. This is simply due to prompt vessels piling up in the area battling for the insufficient amount of cargoes coming into the market. In the week to come we expect this to continue and that the market will remain soft.

Average spot earnings up almost 100 pct w-o-w, although admittedly from record-low levels and still far below OPEX. Further improvements from today's USD 4k/day expected, as in particular fronthaul trades Brazil/China + West Africa/China show increasing volumes. Resultant China-Brazil-China round-voyage values up some 90 pct, but again still at a miserable USD 4k/day. The West Australia/China iron ore trade is stable in healthy volume and up a nominal 25 pct/150 pct in tc-value to USD 6,600. Period activity limited, with focus on less than a handful of operators carefully picking ships either for short period against bookings or in case of longer duration for index-linked structures.

The Panamax market continued its soft appearance from last week, and especially in the Atlantic. The index shows around 2k for TA rounds, however the shorter Baltic rounds are also yielding around same levels.
In the Pacific, we can see some signs of improvement with bids being above last done. The period market which has been next to non-existing during these Covid-19 times, has regained some activity this week with modern Kmaxes being fixed at low 9k for a wider redelivery span.

The Supramax market compared to last week was able to gain small increase in rates with evidence of fixtures reported. The increased activity in the Pacific helped rates rebound, coming up from their lowest market to slightly better level. Main driving force was India and South Asia. We have witnessed good flow of fresh enquiries and rates jumped from range of USD 4-6,000 pd to USD 7-9,000 pd range. Cos Prosperity (55,676 dwt/2006) open Singapore, fixed USD 9,500 for EC India trip China. Ultramax 60’ dwt open Fangcheng for load Thailand redel China USD 7,500 pd. The Mediterranean and Continent was a more active compared to last week’s slow drifting. Small Supra was rumoured fixed from West Mediterranean to India USD 9,500 pd. Also, from West Africa, 58’ dwt was on subs from Owendo to China with manganese ore at USD 10,750 pd. Fixture of mv Antakya-M (55,888 dwt/2005) with dely Chittagong trip via Richards Bay redel Vietnam USD 8,500.

WEST
Although the past week has been a slightly busier one, little or no fixtures have involved the largest owners in the market. This is because owners have so far been unwilling to offer freight on a floating basis while charterers have had an appetite for the same to make unfavourable product conditions more workable. With stronger crude and Saudi cutbacks in the MEG, there seems to be more buy-side interest in USGC FOB cargoes, and it would not be surprising to see owners rejoin the fray with lower fixed rate ideas than previously given length on position lists. However, there remain a handful of relets throughout June, and this could put further pressure on freight in the short term.

EAST
The Saudi dates for June were announced at the beginning of the week, which finally triggered some much needed activity on freight after several quiet weeks. A variety of ships from the owners and traders were taken out, and despite most of these deals still being done at discount levels to last printed Baltic, it took out a lot of the spot open tonnage from the market. Some of these ships later failed subjects, but irrespective of this the sentiment on freight seem to have turned (for now) in the East. Cyclone ‘Amphan’, one of the worst storms to hit Eastern India in decades made landfall overnight. It is still unclear what impact this will have on seaborne imports of LPG into this part of India, if any, but it could potentially result in further delays for ships who are due to discharge there.