OPEC and Middle East sailings in November dropped by 1.5% and 2%, respectively. According to preliminary data, North America arrivals dropped by 4%, while arrivals in the Far East, West Asia and Europe increased by 0.4%, 4% and 0.4%, respectively.
In November, both crude and product spot freight rates registered gains compared with the previous month. This general positive trend has not been detected in the tanker market in a while. Dirty tanker freight rates recovered in November, mainly on the back of higher tonnage demand for Far East destinations. The VLCC market saw the strongest activity during November with freight rates sharply increasing in different regions. On average, VLCC freight rates increased by 40% from the previous month, while Suezmax and Aframax registered lower increases of 18% and 5%, respectively.
Clean tanker spot freight rates gained 2% on average in November compared with the previous month. East and West of Suez rates showed a different pattern. While West of Suez rates showed an increase of 10% from the previous month as a result of a firmer Western market, East of Suez rates remained weak. On an annual comparison, all clean tanker freight rates showed a decline from a year ago.
VLCC freight rates in November up by 27% from a year ago
For the VLCC sector, the market reported a constant increase during the month as market activity increased. While vessel availability was the lowest seen for some time, ship owners were capable of resisting lower freight rates as the market conditions were in their favour.
Spot freight rates for tankers operating on the Middle East-to-East route registered the highest increase among all reported routes. VLCC spot freight rates for tankers operating on the Middle East-to-East route increased by WS19 or 46% in November compared to the previous month. The increase was supported by higher Asian requirements.
Similarly, VLCC spot freight rates for tankers operating on the West Africa-to-East route exhibited a worthy increase in November averaging WS58 points, up by WS16 points or 38% from a month ago. Winter seasonal demand from the West improved tonnage demand and supported VLCC spot freight rates on the long-haul route from the Middle East-to-West in November to average WS38, an increase of 36% from the previous month.
The general gain in VLCC freight rates supported ship owners’ margins while bunker fuel prices declined in all major bunkering ports from a month ago. On average, VLCC freight rates in November where 27% higher than the same month in 2012.
Suezmax up by 18% m-o-m in November
Suezmax spot freight rates also showed an increase in November, up by 18% from the previous month to stand at WS53 points. Rates for tankers operating on the West Africa-to-US route increased by 17% in November to stand at WS55 points, and rates on the Northwest Europe-to-US route gained 19% to stand at WS51 points. The increased freight rates came partially on the back of higher freight rates for VLCC as some owners were considering splitting their cargoes, and partially as increased demand has been seen for Suezmax in different regions.
Aframax also up slightly in November
Aframax market followed the same pattern as VLCC and Suezmax, however Aframax gains remained minor. Aframax freight rates were flat at the beginning of the month as activities were thin in the Mediterranean, however increased delays in the Turkish straits, a flow of activity before the Thanksgiving holidays and bad weather in the Caribbean all together supported freight rates during the month to some extent.
The healthiest increase in this segment was registered on spot freight rates for Aframax trading on the Caribbean-to-US route as it increased by 10% from the previous month to stand at WS102 points. Rates on the Indonesia-to-East route were up by 4% from the previous month to average WS82 points. Spot freight rates for Aframax operating on Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe routes registered the weakest gains of all reported routes. Compared with last month, the Mediterranean-to-Mediterranean rates increased by 3% in November to stand at WS72 points, and the Mediterranean-to-Northwest Europe rates increased by a slight 2% to stand at WS64 points.