The rout in VLCC and suezmax markets continued again today, with spot rates in both segments nearing the lowest levels seen in years.
The suezmax market has been worst affected by weak demand and has declined every consecutive trading day since July 4 due to vessel oversupply and a lack of cargoes, particularly in the Atlantic.
Rates on the Black Sea to Mediterranean (TD6) route are nearing the lowest level seen in almost three years. Today, the run was assessed 3.95 points lower than Wednesday at WS 52.13. Panellists put TD6’s timecharter equivalent (TCE) rate at $4,510 per day, some $2,451 less than yesterday.
Nevertheless, TD6 still has a little way to go before it hits its all-time low of WS 47.46, which was recorded on July 30, 2009, according to Baltic Exchange data.
The other suezmax benchmark route, West Africa to Continent (TD20), is currently at its lowest point since the Baltic began assessing the run on May 13, 2014. Panellists today assessed TD20 rates at WS 45.38, a 2.12-point drop since Wednesday, or $9,205 per day in TCE terms, down by $996.
Some 37 new suezmaxes are due to be delivered in 2016, of which 15 have already been delivered, according to data from VesselsValue.com.
For VLCCs, the picture isn’t quite as gloomy, but rates have been tracking downwards for just over a week.
Cargo supply in June and July has been steady, with 132 counted for June and 137 counted for July, compared to April and May, which both saw 128 cargoes, according to Platts reports.
Much like suezmaxes, vessel oversupply is bringing VLCC rates down, particularly the delivery of newbuildings into the trading fleet. Data from VesselsValue.com says 31 new VLCCs are were delivered this year between January and July, and 27 are due to hit the water from August until the end of the year.
Today, the Middle East Gulf to US Gulf (TD1) benchmark route was assessed at WS 23.42, down 0.66 points from Wednesday and the lowest level seen since August 17, 2015. The timecharter equivalent (TCE) rate for the run today is $5,195 per day, an $802 decrease from a day previously.
Likewise, rates on the Middle East Gulf to Japan (TD3) route are at their lowest level since September 1 last year. Today, Baltic panellists assessed the route at WS 36.19, a 2.46-point decrease, or $19,458 per day in timecharter equivalent terms – a huge $2,551 fall since Wednesday.
The Middle East Gulf to China (TD3C) route was similarly assessed at WS36.62.