Tanker Market Weak Throughout November
The tanker market stayed weak during the month of November, OPEC said in its latest monthly report. Dirty tanker rates remained weak in November. However, signs indicate that November could be the bottom of the market. This gives ship owners hope for 2021. The clean tanker rates have risen from the lowest level in several years. This is supported by the improvement of West of Suez activities.
Global spot fixtures increased in November. They increase 0,22 mb/d or 15%, to average 15,09 mb/d. The increase came as Chinese refineries returned to the market after a hiatus due to the Golden Week holiday. Independent refineries also received another round of import quotas. Spot fixtures were still 4.9 mb/d, or almost 25%, lower than the same month last year. It reflects the overall muted environment due to the COVID-19 pandemic.
OPEC spot fixtures averaged 10.19 mb/d in November, representing an increase of 3% m-o-m, or 0.3 mb/d. Compared to the same month last year, OPEC spot fixtures were 28% lower, or almost 4 mb/d. It reflects in part production adjustments by OPEC countries. Fixtures from the Middle East-to-East averaged 6.5 mb/d in November. It represents a gain of 0.6 mb/d, or 10%, m-o-m. Y-o-y, this represents a decline of 1.6 mb/d or almost 20%. Middle East-to-West fixtures were sharply lower in November. They fall 46%, or 0.6 mb/d, to average 0.7 mb/d. This was still 0.9 mb/d, or 56%, lower compared with the same month last year. Outside of the Middle East, fixtures increased 10% m-o-m, or 0.3 mb/d, to average just under 3.0 mb/d. In annual terms, fixtures were down by almost 32% or 1.4 mb/d.
Sailings and arrivals
OPEC sailings increased 1.7% in November, or 0.35 mb/d, to average 21.07 mb/d. The increase came as more Libyan barrels became available in the market. Sailing in the Middle East is up 0,3 mb/d or 2%. But compared to the same month last year, it is down 21%. Also crude arrivals in November increased m-o-m in all regions except North America.
Dirty tanker freight rates
Very large crude carriers (VLCCs)
VLCC spot rates continued to edge lower in November, falling on average 5% m-o-m. Because the tonnage demand continued to be weak and the unwinding of floating storage increased availability. Rates on the Middle East-to-East route fell 5% m-o-m in November. Rates also dropped on the West Africa-to-East route decrease 2% m-o-m to average WS30 points.
Suezmax rates managed a positive performance in November. It increased by 12%. However, they were still 68% lower y-o-y. The Northwest Europe (NWE)-to-USGC route rose 6% m-o-m to average WS31 points. But this still represented a 66% decline from the same month last year.
Clean tanker freight rates
Clean spot freight rates continued to edge higher m-o-m in November. It increases 2% due to an ongoing improvement on West of Suez route. Rates are up 5% on western routes. East of Suez rates edged down 1% m-o-m in November and remained some 47% lower compared with November 2019.
Source: The Hellenic Shipping News