Fearnleys Weekly Report - Week 39 2022

Fearnleys Weekly Report
Week 39 - October 02, 2022

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Tankers

Comments
VLCC

A couple of quiet days and the tide can turn. However, owners can not be blamed for profit taking, when seeing TCE returns in the USD 80’s per day. Decreasing bunker costs coupled with a quiet cargo list, owners are checking out at numbers lower than last done (mid WS 90's MEG/East, sub USD 10m USG-China). October is looking a lighter month, perhaps unsurprising after a near record cargo count in September for overall VLCC fixings driven by the MEG and USG. However, recession fears in the West and inevitable decreases in US SPR releases, will mean less USG exports going forward. With the OPEC+ 'threatening' to cut production to support oil prices, we may be close to peak VLCC volumes for now. Also worth noting, hurricane Ian may shut in up to 2 mbpd in the Gulf of Mexico and causing delay potential.



Suezmax

The main support mechanism for the global Suezmax market right now is VLCC sentiment, and without this very tenuous link the pure fundamentals of this market, at least in the ultra-short term, are weaker. Let’s start off with the Black Sea which had a very industrious first decade but has now slowed to a whimper for the second, as a mixture of TC/OP listings have taken momentum away from that region. This has left us with a chunk of prompt vessels (or close to being prompt) in this region now missing the Black Sea/Med fixing window, who will now have to gamble on prompter Med cargoes popping out, or, as will most likely be the case, force the majority into entertaining West Africa at lower levels. The East is similarly fundamentally weak and in need of further enquiry to maintain present levels.



Aframax

End of last week the Nsea Aframax market gained some momentum as charterers showed their cards and owners seized the opportunity to dig their heels in and ask for higher rates than last done. This week rates have continued to firm on the back of increased activity. Unless bigger sizes come into play, we expect rates to remain firm as the tonnage list is looking quite thin in the area for any cargoes loading up to 10th October. The Med market moved sideways last week as activity remained firm and some ships ballasted away from the area seeking business elsewhere. The position list looks tight in the front end, but with dates moving forward and some more ballasters ex East the current upside potential could be dampened a bit. However, if the activity continues, we expect the market to remain healthy.



Rates
Dirty (Spot WS 2021)
MEG/WEST (280 000) WS 50.0 -5.0
MEG/Japan (280 000) WS 92.5 -7.5
MEG/Singapore (280 000) WS 93.5 -9.0
WAF/FEAST (260 000) WS 92.5 -7.5
WAF/USAC (130 000) WS 135.0 0.0
Sidi Kerir/W Med (135 000) WS 147.5 -5.0
N. Afr/Euromed (80 000) WS 200.0 10.0
UK/Cont (80 000) WS 210.0 55.0
Caribs/USG (70 000) WS 235.0 -10.0
1 Year T/C (USD/Day)
VLCC (Modern) $37500.0 -$2,500
Suezmax (Modern) $32000.0 $0
Aframax (Modern) $34000.0 $0
VLCC
VLCCs fixed in all areas last week 52 -3
VLCCs available in MEG next 30 days 140 5
1 Year T/C Crude

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Dry Bulk

Comments
Capesize

Last week ended positive as all segments improved with all the west Australian miners being present, south Brazil pushing with Vale covering several liftings and spot tonnage in the north being covered. However, the positiveness disappeared this week as Pacific went from being very busy last week to very quiet this week. Hence, we see a 27% decline in time charter hire week on week for the west Australia to China round trip. Though Pacific has been disappointing so far this week, and general sentiment is weaker, the north Atlantic still holding and Vale still being fairly active thus we see the market holding.



Panamax

Seemingly the Atlantic saw something of a revival this week with some decent levels of activity in the North. Primarily there remained some disparity between the grain and mineral trades with the former still paying a premium with improved levels concluded and sentiment turned a little on the back of some further better deals. The Asian market appeared under pressure from the get-go, with both the Indonesia and NoPac round trips losing further ground as supply/demand fundamentals played out.



Supramax

General situation remains across the Supra desk that demand growth is 0% whereas fleet growth keeps ticking upwards. Discharge waiting times are also down on last year, causing further downward pressure on markets.

Tick downturn on the last weeks activity from the USG, where fhauls were discussed at around USD 23,000. Trip from Cont to USG being concluded about USD 18,000 on Supramax. Bhaul from CJK to Cont were done at USD 20,000. Nopac round on Ultramax being fixed around USD 19,500. Supra from Indonesia with coal run to India concluded around USD 21,750.

Tick more period activity but not at the improved levels though. Ultramax was covered for 3-4 mos at 20k with delivery Atlantic and redelivery ww, another Ultra open in Far East was fixed in the low USD 18,000 for one year.



Rates
Capesize (USD/Day, USD/Tonne)
TCE Cont/Far East (180 DWT) $39,875 $3,187
Australia – China $8.0 -$1.9
Pacific RV $9,159 -$9,068
Panamax (USD/Day, USD/Tonne)
Transatlantic RV $18,250 $3,175
TCE Cont/Far East $27,909 $3,395
TCE Far East/Cont $13,590 -$725
TCE Far East RV $16,614 -$2,728
Supramax (USD/Day)
Atlantic RV $19,029 $402
Pacific RV $16,088 -$162
TCE Cont/Far East $19,808 $775
1 Year T/C (USD/Day)
Newcastlemax (208 000 dwt) $19,000 -$500
Capesize (180 000 dwt) $15,250 -$250
Kamsarmax (82 000 dwt) $18,000 $500
Panamax (75 000 dwt) $16,500 $500
Ultramax (64 000 dwt) $18,000 $1,500
Supramax (58 000 dwt) $15,000 $0
Baltic Dry Index (BDI) $1,760
1 Year T/C Dry Bulk

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Gas

Chartering

EAST
After last week’s fixing frenzy and this week’s APPEC conference in Singapore, activity has comparably slowed down. We have seen about 20 spot fixtures concluded from the Middle East in October, but still expect to see a handful of remaining cargoes before focus shifts to November. Freight ideas remain firm with most owners’ ideas now in the USD 80s RT/C for next Eastern business.

WEST
After having seen a lot of fixing in the West the last 4-5 weeks, we are now witnessing a more quiet week. It looks like October-fixing is currently over as the last remaining ships this period have been programmed. Trader relets are currently dominating a very tight position list while the big shipowners seemingly are sold out until the middle of November.

We have seen a dozen November deals in the USG so far, with last done at USD 130 H/C and 70 H/F, and there is a lot more to be done going forward.



LPG Rates
Spot Market (USD/Month)
VLGC (84 000 cbm) $1,800,000 $200,000
LGC (60 000 cbm) $1,200,000 $350,000
MGC (38 000 cbm) $900,000 $0
HDY SR (20-22 000 cbm) $725,000 $25,000
HDY ETH (17-22 000 cbm) $780,000 $30,000
ETH (8-12 000 cbm) $490,000 $0
SR (6 500 cbm) $440,000 -$10,000
COASTER Asia $270,000 $0
COASTER Europe $310,000 $0
LPG/FOB Prices - Propane (USD/Tonne)
FOB North Sea/ANSI $635 $0
Saudi Arabia/CP $650 $0
MT Belvieu (US Gulf) $454 -$70
Sonatrach/Bethioua $640 $0
LPG/FOB Prices - Butane (USD/Tonne)
FOB North Sea/ANSI $599 $0
Saudi Arabia/CP $630 $0
MT Belvieu (US Gulf) $423 -$55
Sonatrach/Bethioua $612 $0

LNG Rates
Spot Market (USD/Day)
East of Suez 155-165 000 cbm $200,000 $50,000
West of Suez 155-165 000 cbm $200,000 $55,000
1 Year T/C 155-160 000 cbm $165,000 $22,000


Newbuilding

Activity Levels
Tankers Slow Slow
Dry Bulkers Slow Slow
Others Moderate Moderate

Prices
VLCC $121.0 $0.0
Suezmax $81.0 $0.0
Aframax $63.5 $0.0
Product $43.5 $0.0
Newcastlemax $66.0 $0.0
Kamsarmax $37.5 $0.0
Ultramax $35.5 $0.0
LNGC (MEGI) (cbm) $240.0 $0.0


Sale & Purchase

Prices
Dry (5 yr)
Capesize $48.0 -$2.0
Kamsarmax $32.0 -$2.0
Ultramax $30.0 $0.0
Dry (10 yr)
Capesize $33.0 -$1.0
Kamsarmax $24.0 -$2.0
Ultramax $22.5 -$1.5
Wet (5 yr)
VLCC $85.0 $0.0
Suezmax $60.0 $1.5
Aframax / LR2 $56.0 $2.0
MR $40.0 $1.0
Wet (10 yr)
VLCC $64.0 $4.0
Suezmax $45.0 $2.0
Aframax / LR2 $42.0 $2.0
MR $29.0 $0.0


Market Brief

Exchange Rates
USD/JPY 118.50 2.53
USD/KRW 1235.50 7.25
USD/NOK 9.24 -0.01
EUR/USD 1.10 0.00

Interest Rates
LIBOR USD (6 months) 4.23% 0.02%
NIBOR NOK (6 months) 2.58% 0.00%

Commodity Prices
Brent Spot $88.00 -$1.50

Bunkers Prices
Singapore 380 CST $390.0 -$96.0
Singapore Gasoil $936.5 $11.0
Rotterdam 380 CST $416.0 -$14.0
Rotterdam Gasoil $947.5 -$55.0

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All rates published in this report do not necessarily reflect actual transactions occurring in the market. Certain estimates may be based on prevailing market conditions. In some circumstances, rates for certain vessel types are based on theoretical assumptions of premium or discount for particular vessel versus other vessel types.


Disclaimer