A good Q1 for tankers becomes a distant memory in April
As we approach the end of April, the good start to the year in the large crude tanker market seems like a distant memory. From a record 212 VLCC spot fixtures in January, we were down to 144 fixtures in March, according to New York marine services company McQuilling.
As we approach the end of April, the good start to the year in the large crude tanker market seems like a distant memory. From a record 212 VLCC spot fixtures in January, we were down to 144 fixtures in March, according to New York marine services company McQuilling. That 32% decline was not balanced by any increase in period fixing according to its latest industry note. The increase in trade from West Africa to China was soon swamped by the number of owners wanting to cash in on this one bright spot.
It was the same story for suezmaxes, if not so extreme, where global spot fixtures fell from 226 in January to 200 in March. The bulk of the decline McQuilling puts down to the collapse of the transatlantic suezmax trade as a result of the US shale oil production.
Since most charterers prefer VLCCs to take West African oil to China, long haul suezmax opportunities from the region have all but dried up, except when it becomes more cost effective to hire two suezmaxes than one VLCC which did happen in the first quarter.
As delays subsided and tonnage built up suezmax rates from the Black Sea tumbled - 54% from January to March.
For aframaxes, Caribbean rates in January were at their highest level for six years with weather delays the main culprit. But as they subsided rates fell through the quarter until they were 10 WS points lower in March than a year ago. Med rates also reached significant highs in January due to delays in the Turkish straits and the reopening of the Zawia terminal in Libya. However they lost a massive 87 WS points in February before recovering slightly in March.
The good news was only on the supply side with just two VLCCs, net, added to the fleet, no suezmaxes, eight aframaxes exited with no deliveries.