The November MEG program is in full swing, however rates continue on a downward trajectory. Any normal year we’d see increased demand and rates ticking up for the winter season, but Covid-19 has put a stop to any normality. MEG/East rates are drifting down through the WS20’s, and Wafr/eastbound rates have also dipped below the WS30 mark. From the USG, often an area of strength in comparison, charterers are understandably using their own vessels whenever possible. Many owners are taking the opportunity to dry dock their vessels in this depressed environment. However, upon completion these ships often become sitting ducks, given the (arguably) misplaced ‘perception’ of cargo clingage. Still, charterers have plenty to choose from, and without a viable vaccine and a big shift in global demand we expect more of the same.

Coming into this week, Suezmax owners had a different mindset than they have had in several months. Increased activity at the end of last week, with prompt cargoes begging for offers during the weekend, made owners bullish for the first time in a while. The main factor behind this is the massive export from Libya entering the market. This activity pushed Med/East rates up USD 500k, and even TD20 was up 7.5p in a couple of hours. Owners were holding back, and market looked to be improving significantly. But as charterers managed to keep their cool, it all slowed down quickly. Tonnage list is looking healthier but still plenty of ship to fix, and owners started taking out cargoes one by one. Now we see healthier tonnage lists both in the East and Atlantic, but still prompt ships around, and we expect market to stabilize.

The Nsea/Baltic Afra market remains at bottom levels this week, and November lifting schedules do not indicate any upward pressure. The x-factor being the surging coronavirus cases across Europe which could possibly lead to some storage inquiries. Unless alternative markets attract ballasters away from the area, we expect rates to remain gloomy in the week to come. In the Med/Bsea however, we have seen a relatively active week for the first time in a while with the return of Libya being the main force. Owners will be excited to finally see an upward trend in freight levels, as benchmark routes have picked up close to 10 points since last week. With the Med being a bit more of an attractive area for Afras to be in now, we expect the market to remain firm in the week to come.

General levels for the big ships slightly up last 5 trading days, trying find a direction whilst navigation in a sea of overall Covid-19 related uncertainty. Iron ore and bauxite fundamentals for the Brazil option West Africa/Far East fronthaul route look promising, giving a very healthy supply/demand ratio for remainder of year. Value for the China-Brazil-China round trip up 10 pct w-o-w to come in at USD 17k. Coal trades continue to perform below expectations as Chinese political bans still take their toll, only just partly offset by mixed fleet inefficiencies and Indian stockbuilding. With FFA levels for 2021 standing at USD mid 13k's and thus far from matching physical expectations, period activity is limited - focus being on floating structures of which recent include 178,000/2010 reported done for around 12 months at ave5tc + 1.5 pct.

The Panamax market seemed to be a 2-tier market beginning week, with lower levels being achieved on voyage basis in the Atlantic. This took a turn on Tuesday where we see more activity out of North Atlantic and especially shorter round trips has inked up the index. Same goes for fronthauls where the activity out of USG to Far East has increased and ECSA being without any direction. TA’s are currently yielding mid 11’s while fronthauls are trading in the low 20’s. In the Eastern Hemisphere we see a softer tone with rates slowly sliding downwards and Pacific rounds are being fixed in the low 11’s.

Majority of Supramax routes losing ground this week. Atlantic felt softer with especially USG falling farther behind. Fronthaul from USG to Far East was concluded at low 20s now. After strong period also the Continent started to drop off. Fronthauls paying at ca 23,000. Trips to USG being fixed at USD 13,000. For ECSA inbound tick less. Gloomy feelings across Asian routes as well. Ultramax was fixed for a trip from Indonesia to China at 12k. North China to ECI was covered at 9k on Supra. Vessel open South China fixed for a trip via Indonesia to EC India at mid 8k. On the period side, Supras were fixed in the low 9s in Far East.

EAST
Although one trader relet was booked yesterday for a vessel swap, we are still left with a handful of possible open ships from traders during 2H November. There is currently not an abundance of activity going on in the East, but we do expect to see more cargos shown to the market later, and especially during last decade of November. Owners’ ideas are currently in the USD mid 60s Baltic, but some might be incentivized to do slightly less if they can book their ships close to vessel dates. On the other hand, if various parties end up moving on freight at the same time rates could jump further.

WEST
West has taken a step back this week as fixing window has moved into 2nd decade December for US loadings. West and East freight rates at par at TCE around mid USD 50k's pd. October has been expected to see record exports ex US at close to 75 VLGC cargoes lifted, but with only a few days left of the month it looks like delays in loadings could cause the record from April this year to remain.