2021 has kicked off with a whisper, with reduced Middle East Gulf volumes and a tonnage build up. Rates have gone from weakness to weakness, and for the first time in years we have seen fixtures concluded yielding negative returns – in other words owners paying for the privilege – and risk – to carry crude oil from A to B. From a slim January program the tonnage overhang into next month is greater that seen for a long time, not helped by ships coming off storage and quicker turnarounds. The Atlantic has been a saving grace, in a manner of speaking, although rates for the longer haul voyages have also given way with correspondingly lower earnings, barely showing positive returns. Alas, with February being a short month, and Chinese New Year celebrations to bout, we do not foresee a pickup any time soon.

The Suezmax market have started the new year very different from where it ended 2020. Cargo activity has been higher than expected, and also worth noticing; rather steady the last couple of weeks. This has helped removing the huge overhang we had in the Atlantic, and the tonnage list in West Africa is now looking tighter, at least the front side of the list. Owners are more bullish and managing to hold back instead of jumping on every possibility out there. Still, we need to remind ourselves that TD20 is not making owners rich at the moment, with TCE's at less than USD 5k/day, but nevertheless a huge step in the right direction. The East market is also picking up, with West Africa giving owners a different alternative, but a bit more balanced tonnage list might demand more patience from owners.

The North Sea/Baltic market has remained steady this past week with owners facing even negative returns for some runs. As new ice developing in Baltic and delays in some strategic ports of the North Sea, we see charterers fixing forward in order to secure ice-class tonnage for the first stems of February. As a result, there might be some tight windows in the days to come, but overall we expect rates to continue moving sideways at current levels. In the Mediterranean/Black Sea the tonnage list remains long. As expected, the rates have moved sideways at bottom levels this last week, and signs of a notable market recovery in the short run are hard to find. At the moment we see most charterers picking their ship and fixing her off market, as there is enough to choose from. Also in the Mediterranean/Black Sea we except the market to move sideways in the week to come.

Mixed developments but general trend again positive for the big ships after a brief dip, average daily earning just briefly down to USD 25,500/day over last 5 trading days. Coal and operator activity low in the Far East, and weather issues negatively affect West Australia/China iron ore flows. Resultant value for Pacific rounds down some 35 pct w-o-w to come in at USD 17,500. Atlantic remains very strong and in need of available tonnage, value for rounds at times now exceeding USD 40k/day. Fronthaul trades characterized by low supply and great iron ore + coal expectations, China-Brazil-China rounds up almost 10 pct to USD 20,500/day. Period activity limited as discounts required to conclude long term makes enjoying spot levels more tempting for most owners.

The Panamax market cooled off end of last week for all trades except breaching Baltic cargos and ECSA grain hauls. This trend has continued into this week, and we do see owners booking forward cargos for March/April well below current spot earnings. The period market has continued to pick up thus some optimistic views are still out there. P1A is currently yielding in the low 16k while fronthauls are fixing in the 23k region basis Continent delivery. In the Eastern Hemisphere we also see a downward trend with Pacific RV’s fetching in the 12’s.

After a strong start of the year the market remains firm. C.Mediterranean/West Africa, 58,000 dwt is being fixed 20k. Ice remains in Baltic which is giving a solid premium for ice traders. Charterers bidding Supramax delivery Continent upto 13k for sp Atlantic. An Ultramax was reported fixing around 15,500 dop Continent for a trip to Brazil. Owners keep asking around mid 15+mid 500 for ECSA fronthaul without getting too much traction. Ultramax in ballast direction the Atlantic asking 13k redelivery Mongla for 4-6 months, whilst a 58’ open WCI/MEG asking 13k for same period. We expect the market to remain firm.

EAST
This week started off with the news of about 4-5 canceled February Aramco cargoes. As such, in an already relet-dominated market, even more, open ships started to appear, and the number of workable cargoes was at some point seemingly nowhere to be found. Freight ideas significantly lower than of last done have been circulated without much luck to be found. One Indian player has now placed a vessel on subs in the low 80s equivalent, while there are talks of 2-3 more expected from Indian companies to be quoted. Meanwhile, we remain to see any substantial demand for fixing, one which is very much needed, if we are to hope for an end to the current market freefall.

WEST
With the exception of one very late market call for a late January loader out of the US Gulf, there has been little or no action in the region. A few cargoes have changed hands, but the cargoes traded has been intended for own ships or ships already on charter as that is the only solution that makes economic sense in the current trading environment. The fundamental supply/demand of ships has not changed much, and more inefficiencies are in the pipeline with the seasonal fog forecasts just around the corner.