Fearnleys Weekly Report

Fearnleys
Weekly Report

Week 21 - May 27, 2022





01

Tankers


VLCC

If the plan works, why change it? Charterers working from the shadows, picking a target and keeping quiet on the details is holding the current market at the status quo. This week we have counted over 20 vessels tucked away on business with no details attached. So it stands to reason that had these cargoes worked openly, we would be in a different world (or at least a few points more). Still, ships disappearing off the position list can’t be ignored and bunkers ramping up close to USD 1000/mt, owners are starting to push back. MEG/East is trickling up through the very low WS 40’s, depending on age/quality required. The Atlantic is feeding off Suez & Afra markets which are showing some heat. At the time of writing, only 10-15 VLCC’s in the West (or heading West) available to work. Tighter and firmer in the short term likely.


Suezmax

It's a game of two hemispheres this week, with all the action confined to the West. The tight US Gulf is the key factor as charterers scramble to find the cheapest vessel DPT (Suezmax, Aframax,VLCC), which in itself only adds to owner sentiment. Td20 in isolation should, if supply/demand models were the only variable to consider, trade moderately up, but there is now momentum in the market and more cargoes are being forced to work in the open market which will see rates push through the WS 100 mark. The East is relatively quiet, save for MEG back haul enquiry, which may just prevent Wafr from taking a really purposeful rate jump. TD23 trades in the mid/high WS 40's whilst a China run needs testing, but owners will be looking for something starting with at least a 9. VLCC's are inevitably the cap.


Aframax

Yet another lackluster week for Aframax owners trading in the North Sea and Baltic area with rates moving sideways. The tonnage list might be looking tighter as ships will ballast away from the area turning their bows to cross the Atlantic where the market is currently looking more favorable. However, we still need the volume to support any uptick in rates, and with maintenance expected for a couple strategic ports in the Nsea for June we might see the market continue to move sideways going forward.

The Med/Bsea continued sideways last week, even dropping a few points as charterers can pick and choose among the many spot ships in the area. We now see a few of them ballasting their ships TA to take part in a stronger US-market. We are not expecting the market to firm up sufficiently in the short run.


Rates

Dirty

(Spot WS 2021, Daily Change)


Click rate to view graph

MEG/WEST

280'

25.0

1.5

MEG/Japan

280'

43.0

3.0

MEG/Singapore

280'

44.0

4.0

WAF/FEAST

260'

45.0

1.5

WAF/USAC

130'

97.5

12.5

Sidi Kerir/W Med

135'

95.0

2.5

N. Arf/Euromed

80'

125.0

-5.0

UK/Cont

80'

140.0

0.0

Caribs/USG

70'

200.0

62.5


1 Year T/C

(USD/Day, Weekly Change)


Click rate to view graph

VLCC

Modern

$22,500

$0

Suezmax

Modern

$19,000

$0

Aframax

Modern

$23,500

$0


VLCCs


Click rate to view graph

Fixed in all areas last week

57

-5

Available in MEG next 30 days

159

-24


1 Year T/C Crude

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02

Dry Bulk


Capesize

Slight turbulence at healthy levels for the big units, with most concern being on inter-pacific volumes/activity and consensus hovering around USD 33k/day. The West Australia/China iron ore conference trade remains the fundament, but with a sudden appearance of early ships the value for Pacific rounds has slid more than 20 pct the last 5 trading days to stand at USD 31k. Transatlantic trades better in comparison, with limited tonnage supply combined with substantial base commodity volumes to move, pushing daily earnings up some 15 pct to approach USD 29k. Fronthaul iron ore trades still delivers well below expectations. Substantial focus on period amongst major takers, with forward expectations being contango or close - representative fixtures include 179,000 dwt, built 2013, done for almost 2 years at USD 31k, also 181,000 dwt, built 2016, fetching USD 26k basis about 5 years.


Panamax

A weaker and softer tone engulfed the Panamax market this week, with a distinct lack of fresh demand impacting market sources said. The Atlantic was said to be lacking any substantial transatlantic activity, consequently tonnage began to show signs of building up resulting in weaker bids as charterers appeared to hold the upper hand. Asia returned something of a stand-off with a wide bid/offer spread, neither owners nor charterers willing to concede culminating in a slow and inactive days trading with little reported.

Some representative fixtures this week:

Shandong Fu Hui (81,782/2017) Algeciras 5-10 June was rumored to have fixed for a trip via US Gulf option NC South America redelivery Far East at $40,000 with ADMI.

Cape Akamas (79,454/2010) Masinloc 26 May fixed for a trip via Indonesia redelivery Taiwan at $26,000 + $80,000 ballast bonus, but further details were lacking.

Ettys Perfection (76,635/2007) Spore 8 May TCT via ECSA redel Spore-Japan $24,000 – COFCO.

Ocean Thyme (82,306/2014) Gib 4 Jun TCT via NCSA redel Skaw-Gib $29,500 – ULTRABULK.

TBN 75,000/5 coal Newport News/Vizag 21/30 Jun 40,000/25,000 SSHEX bends $53.15 FIO – SAIL.


Supramax

The BSI-58 10 T/C route is volatile on week-to-week basis, however the average index remain on similar levels above USD 30,000 pd. Supramax market continues its positive tone and once again we can experience sustainable market despite all the distractions from global perspective of view. The Pacific market is stable with rates maintaining at very high USD 20,000 pd, while transatlantic round voyages paying just a bit more than USD 30,000 pd. USG numbers seems to be under pressure and ECSA describes as firm and stable. Ultramax asking USD 25,000 pd plus USD 1.5M gross BB delivery Santos for TCT to Singapore- Japan. Ultramax 63’ DWT delivery Argentina rumored to be fixed at USD 50,000 pd for trip with grains to WCSA. Fronthaul from the Continent and Mediterranean pays around USD 25,000 pd, while backhauls USD 35,000 pd. We expect the market to be firm with high volatility next coming weeks.


Rates

Capesize

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


Click rate to view graph

TCE Cont/Far East

180'

$55,122

-$2,983

Australia/China

$14.0

-$0.4

Pacific RV

$30,982

-$3,026


Panamax

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


Click rate to view graph

Transatlantic RV

$29,175

-$700

TCE Cont/Far East

$39,845

-$587

TCE Far East/Cont

$22,513

-$158

TCE Far East RV

$29,521

-$330


Supramax

(USD/Day)


Click rate to view graph

Atlantic RV

$28,940

-$1,116

Pacific RV

$30,071

$1,500

TCE Cont/Far East

$25,513

$175


1 Year T/C

(USD/Day, Weekly Change)


Click rate to view graph

Newcastlemax

208'

$37,000

-$4,000

Kamsarmax

82'

$27,000

$500

Ultramax

64'

$30,000

-$1,000

Capesize

180'

$30,000

-$4,000

Panamax

75'

$24,500

$500

Supramax

58'

$26,500

-$500


Baltic Dry Index (BDI)

3127



1 Year T/C Dry Bulk

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03

Gas


Chartering

EAST
The MEG market has been quite active lately and during the course of this and last week, rates have increased from mid USD 70's to around USD 90 on Ras Tanura/Chiba basis. This brings the East and West market earnings almost at par around mid USD 50,000 per day for a conventional vessel running VLSFO. As a consequence, more owners are considering to ballast towards Singapore instead of going straight to Balboa after Far East discharge, which has been the name of the game for the last couple of months this year. A good amount of spot FOB sales and some distressed cargoes has contributed to lifting the sentiment, however, the question remains for how long this will last.

WEST
The western freight market continues to be strong with last done deal concluded at mid 130s Houston/Chiba and mid-high 70s Houston/Flushing range. At the time of writing there are still a handful of vessels left in end June, but with as much as 35 spot fixtures so far in June it is likely that we will see couple of them be pushed over to early July which is where focus now has shifted towards. There are more relets appearing, but the position list still remains tight for the first half of July and with the expectation of a big build in US inventories we expect the rates to maintain.


LPG Rates

Spot Market

(USD/Month, Weekly Change)


Click rate to view graph

VLGC

84'

$1,700,000

$100,000

LGC

60'

$1,200,000

$0

MGC

38'

$940,000

$0

HDY SR

20-22'

$710,000

$0

HDY ETH

17-22'

$820,000

$0

ETH

8-12'

$525,000

$0

SR

6.5'

$470,000

-$10,000

COASTER Asia

$270,000

$0

COASTER Europe

$385,000

$0


LPG/FOB Prices - Propane

(USD/Tonne, Weekly Change)


Click rate to view graph

FOB North Sea/Ansi

$730

$0

Saudi Arabia/CP

$850

$0

MT Belvieu (US Gulf)

$619

-$25

Sonatrach/Bethioua

$730

$0


LPG/FOB Prices - Butane

(USD/Tonne, Weekly Change)


Click rate to view graph

FOB North Sea/Ansi

$849

$0

Saudi Arabia/CP

$860

$0

MT Belvieu (US Gulf)

$540

-$17

Sonatrach/Bethioua

$835

$0


LNG Rates

Spot Market

(USD/Day, Weekly Change)


Click rate to view graph

East of Suez 155-165k CBM

$69,000

$1,000

West of Suez 155-165k CBM

$77,000

$2,000

1 Year T/C 155-165k TFDE

$110,000

$0





04

Newbuilding


Activity Levels

Tankers

Slow

Dry Bulkers

Slow

Others

Moderate


Prices

(Million USD, Weekly Change)

VLCC

300'

$118

$0

Suezmax

150'

$80

$0

Aframax

110'

$63

$0

Product

50'

$43

$0

Newcastlemax

210'

$66

$0

Kamsarmax

82'

$37

$0

Ultramax

64'

$35

$0

LNGC (MEGI) (cbm)

170'

$225

$0





05

Sale & Purchase


Prices

Dry 5 yr old 10 yr old
Capesize $52.0 $37.0
Kamsarmax $36.5 $27.5
Ultramax $35.0 $27.0
Wet 5 yr old 10 yr old
VLCC $76.0 $54.0
Suezmax $52.5 $39.0
Aframax/LR2 $47.0 $32.5




06

Market Brief


Exchange Rates

(Daily Change)

USD/JPY

118.50

2.53

USD/NOK

8.92

-0.03

USD/KRW

1235.50

7.25

EUR/USD

1.10

0.00


Interest Rates

(Daily Change)

LIBOR USD (6 month)

2.05%

-0.01%

NIBOR NOK (6 month)

1.70%

-0.06%


Commodity Prices

(Daily Change)

Brent Spot

$114.00

$1.50


Bunker Prices

(Daily Change)

Singapore

380 CST

$664

-$24

MGO

$1,140

-$98

Spread MGO/380 CST

$476

-$74


Rotterdam

380 CST

$665

$14

MGO

$1,136

$3

Spread MGO/380 CST

$471

-$11


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