Document 6588452

US STILLL SPOO
OKS IRAN
31st October 20
014
While much of the wo
orld’s atten
ntion has b
been defle
ected awa
ay from the
e US and EU
E ‘stand-o
off’
with Iranian sanctionss, it appea
ars that th
he situatio
on is unlike
ely to disssipate soon. While the
t
ele
ection of a more mo
oderate Iranian presid
dent in 2013 produce
ed an imm
mediate imp
provement in
relations, the
e sanctions remain in
n place. FFollowing the
t
start of
o dialogue
e and the relaxation of
the
e hard play by the
e west, ma
any experrts were fo
orecasting
g a reversa
al to the pre-sanctiion
relationship as the western powe
ers appea
ared to be more focused on th
he situation in Northe
ern
Ira
aq and Syrria as well imposing further
f
san ctions aga
ainst Russia
a. Iran wass very muc
ch pushed off
of the front pages unttil earlier th
his month. In early October
O
Iran once ag
gain refuse
ed to answ
wer
qu
uestions fro
om the Inte
ernational Atomic En
nergy Age
ency (IAEA) on its nu clear prog
gramme. Irran
ha
ad previously agreed
d to resolve
e “practica
al measure
es” with the agency by August 25th, ahead
of the latest round of peace tallks which w
were scheduled for mid-Octob
ber in Vien
nna, but no
ow
de
eferred to llate Novem
mber.
On
ne item tha
at impactss on the ta
anker markket is the European Union
U
allow
wing sanctions on Iran’s
ma
ain owner NITC to la
apse follow
wing court ruling in July that orrdered the
e measuress to be lifte
ed.
NITTC has alw
ways conte
ested the EU’s
E
blacklissting arguiing that the compan
ny is private
ely owned as
op
pposed to
o a govern
nment controlled e ntity. No appeal
a
was lodged
d by the EU and th
hus
ally suspen
sanctions we
ere annulle
ed at the beginning of Octob
ber. Rulings are typica
nded for tw
wo
mo
onths pend
ding appe
eals. While this ruling w
will allow NITC
N
to resu
ume norm al relationss with the EU,
sanctions wiith the US remain very much in place. This will mean
m
thatt NITC will continue to
strruggle to o
obtain insu
urance cov
ver, but pe
erhaps mo
ore significantly acce
ess to ban
nks and oth
her
related serviices. EU pa
arties dealling with N
NITC may also
a
be exposed to ssome kind
d of backla
ash
fro
om US auth
horities as a consequence, so th
here is still reason to tread
t
with caution.
It is p
perhaps iro
onic that the
t
recen
nt weakne
ess in world oil
dema
and may in fact ha
ave
a big
gger influen
nce on Iran’s
abilityy to exporrt its precio
ous
crude
e than th
he impositiion
of th
he 2012 sa
anctions. On
O
severral occasio
ons there has
h
been
n evidenc
ce of VLC
CC
tonna
age waitin
ng for lengtthy
perio
ods off of the Iraniian
coastt and not employed
d in
permane
the
ent storage
progrramme. However,
H
Irran
conti nues to export
e
larrge
quan
ntities of crude to
China
a, with lessser amounts
to Ind
dia and So
outh Korea as
we
ell as Suezm
max cargo
oes discharrged into M
Mediterran
nean locations. The n
next deadline for a de
eal
on
n the nucle
ear programme is No
ovember 24
4th. It is posssible that if the Irania
an regime continuess to
test the US g
governmen
nt’s resolve
e to end itss nuclear programm
p
me, more p
pressure willl be heap
ped
up
pon those importers to
t eliminate
e their purc
chases in favour
f
of other
o
suppliiers.
CRUDE
Middle East_________________________
After a slight firming at the end of last week, VLCC
Charterers decided to kick the week off by showing
several cargoes early doors, and Owners politely
responded by putting their rates up. This continued
for most of the week and rates were particularly
helped by several tricky 'all options' cargoes, and
also it has to be said the new Frontline/TI link-up is
helping to build Owners' confidence. The week has
ended a little more quietly hovering in the high ws
50's for East and low 30's for West, but with the
combination of several other factors such as the
December West Africa programme, Atlantic VLCCs
stronger, and other sizes stronger especially
Suezmaxes in the AG, things should continue to be
challenging for Charterers in the week ahead. AG
Suezmaxes have seen very strong enquiry this week,
and with a lack of tonnage that has been going to
Asia recently there is real hope that this will become
more than just a backhaul voyage. The week ended
with rates upto ws 60 West and mid ws 90's East.
Aframax rates continued to rise with 80,000 by ws
110 being paid, with potential for further gains next
week.
West Africa_________________________
Suezmax rates have gone from strength to strength
thoughout the week, with each day passing Owners
obtaining higher levels. The week is ending on an
active note with many cargoes remaining
uncovered and Owners looking to push rates above
130,000 by ws 80 for European discharge. Although
VLCC's saw little enquiry, there has been plenty of
fixing from all the other areas including Brazil,
Caribbean, North Sea and even Sidi Kerir, acting like
an ambush on West Africa which could drive those
rates up as the December programme is attacked
over the next few days. On the flip side, Owners may
view that a long voyage at these levels in the high
50's could be quiet attractive, especially at the new
lower bunker prices.
Mediterranean____________________
A productive week for Aframax Owners. A
succession of Libyan stems coupled with some ports
not processing ships as quickly as usual (Trieste,
Genoa) led to tonnage growing thin and charterers
paying above last done with each fixture. The 2 digit
fixtures of the beginning of the week soon became
a distant memory as ws 107.5 and then ws 120 being
done for X-Med voyages. Potential for higher rates
today and the longer term picture however will no
doubt see rates settling as the calm comes after the
storm. Suezmax Owners have watched West Africa
for inspiration which has moved along albeit slowly.
Towards the end of the week several Mediterranean
cargoes emerged at improved levels of 135,000 to
Med at ws 87.5 and 130,000 for a longer haul to EC
Canada at ws 62.5.
Caribbean_________________________
The Caribbean and Brazil areas saw continued
strong VLCC enquiry and each fixture just saw a
nudge further up, ending the week at $6.25 million
for a voyage to Singapore. With a tight position list
going well into December there is little to suggest
that rates will not continue to climb further. Aframax
rates quickly strengthened in the early part of the
week and rates peaked at 70,000 by ws 165
upcoast. Activity then evaporated and a
downward correction in rates is anticipated.
North Sea___________________________
The North Aframax market found itself in a
precarious situation this week, with Charterers
finding cargoes tricky to cover. On the surface the
tonnage lists appeared balanced; but when you
dug a little deeper and a mix of uncertain itineraries,
ships being swallowed into their own programme,
an increase in the fuel oil and a general resistance
to fix certain cargoes by Owners resulted in the firm
market that we saw. Rates held at 80,000 by ws
102.5 for North Sea voyages and the Baltic moving
up from 100,000 by ws 72.5 at the start of the week
to 100,000 by ws 85. Suezmax rates have remained
unchanged throughout the week with Owners
willing at ws 52.5 for States discharge. Like elsewhere
in the Atlantic, VLCCs just continue to rise with each
fixture, and $5.25 million was reportedly fixed for
Rotterdam to Singapore. The next one could be
higher again.
CLEAN PRODUCTS
East______________________________
LRs have had a very exciting week with LR2s in
particular taking the lead and seeing a sharp
upturn. LR1s are sure to follow through with plenty
of cargoes still remaining uncovered. 75,000 mt
Naphtha AG/Japan is up to ws 135 and 90,000 mt
Jet AG/UKC is $3.1 million. These rates should
remain steady for now with Owners just locking in
the profits. 55,000 mt Naphtha AG/Japan is at
parity at ws 135 levels and 65,000 mt Jet AG/UKC
is $2.4 million but still firming. This firmer patch looks
likely to be maintained for the remainder of the
year.
The MRs have had a week of consolidation, rates
remain firm, but activity hasn't been as prolific and
hence some deals have been done at less than
last done. TC12 is fixing at ws 120 -125 levels and
looks quite steady, however with LR's both in
excess of ws 130, surely TC12 should also firm. East
Africa has seen a wide spread with ws 195 on
subs, but 15 points less also going on subs
subsequently. Certainly not every boat is there to
repeat ws 180. AG to UK Continent is fixing at
$1.75 million. The short haul's remain very firm, with
X-AG voyages fixing
$330-350,000. The list remains reasonably tight and
given the splurge of activity on the LRs, MR
Owners will be hoping that cargoes get split and
thus bringing further cargoes to the market. In
general, rates are steady and with continuing low
bunker prices, Owners are contented.
Overall, the North Asia MR market has had
another relatively steady week, although for the
most part, the position list versus the distribution of
cargoes has been in imbalance. The prompt
position has looked more exposed with ample
available tonnage, whereas there have been a
good amount of cargoes during the midNovember window, and last done has reportedly
been beaten off these dates. Overall though, the
two date windows counterbalance each other
and Korea/Singapore is fairly steady at around
$500Kt levels on the MRs. It is a different story on
the LR1 and LR2s, where the firmness of the Middle
East market means that most Owners will decline
a backhaul unless the returns are fruitful. LR1
Owners will now be gunning for above $600Kt for
Korea/Singapore and although last done on the
LR2s was $625Kt, most Owners will not do the
backhaul at these levels now. Singapore on the
MRs is quiet, and although the AG is firm, the `pullfactor’ from the TC12 market is not strong enough
to detract enough tonnage from the area to
allow rates to firm. Singapore/Australia should fix
at 30kt x ws 177.5 levels and looks steady.
Mediterranean____________________
More hustle and bustle in the Mediterranean
market in week 44, with the front half of the week
a real scramble for ships especially in the East
Med and Black Sea. The market rates have
oscillated as a result, with highs of 30 x ws 240-265
reported on subjects from Black Sea (both failed)
but most fixtures confirmed in the 30 x ws 200-210
bracket. The end of the week has been much
calmer and the market particularly in the West
Med feels softer, however the market direction
depends very much on how busy the East
Med/Black Sea market will be over 10-15
November window. The MRs have had a rather
slow week in terms of natural 37kt stems, but many
Owners have been interested to fix short on 30kt
clips given the current highs. Longhaul rates have
slipped slightly though and now considered 37 x
ws 140 Transatlantic / 37 x ws 160 West Africa /
$900-950Kt Red Sea.
UK Continent_____________________
A touch quieter on the Cont this week, with 37 x
ws 150 finally being broken yesterday and now
MRs trading at ws 140 for Transatlantic. West Africa
has also slipped in line to ws 160. Handies and
Flexis are very firm, a combination of product
discharging delays and continued activity has
formed a very tight supply of ships pushing rates
North to 30 x ws 195 and 22 x ws 215. LR1s have
been fixing and failing all week, but with a steady
flow of enquiry in the market and an active Black
Sea and Med market, the list now looks very tight
for the next few weeks and 60 x ws 117.5 on subs.
LR2s remain extremely tight off the Cont, $2.7-8
million Med/East although limited options after so
many vessels have gone East.
Caribbean________________________
A quieter week in the USG as cargoes started to
stall in the market and Charterers began putting
pressure on rates. TC14 has softened as a result to
ws 90 levels, and again has been a quiet route.
Most activity trades down to Brazil with the
Petrobras refinery reportedly in maintenance, with
38 x ws 150 the conference rate.
DIRTY
Y PRODUCTS
Handy______________________
_________
__
Ground has co
ontinued to
o be made by Ownerss this
wee
ek on where
e some may
y say the market should
d be
by this time of tthe year.
nean market has ben
nefitted fro m a
The Mediterran
couple of late running ships and aw
wkward carg
goes
to cover,
c
and Owners have been able to p ut a
prem
mium on their ships witth a firm itinerary. ENI o
once
aga
ain has had
d fun covering a Kavka
az stem off 8-10
with
h some Own
ners trying th
heir luck witth exponen tially
high
h offers. A
As the wee
ek comes to a closse a
stale
emate has been met,, and who gives in firs t will
dec
cide where m
market rate
es are.
t
Contin
nent, an equally
e
stro
ong week has
In the
passsed. Althou
ugh rates haven’t
h
jum
mped quite
e so
muc
ch as the Mediterra
anean, the feeling o
of a
stron
nger, bette
er built rise
e on rates is there. With
alternative sized tonnage picking up the pace also,
ering
expect a few more “splitt” cargoes to be ente
nd putting pressure on
o natural 30kt
the market an
ms. All eye
es peeled for the to
onnage listss on
stem
Mon
nday.
MR
R________
_________
_________
________
A change
c
of market
m
stre
ength in the
e Continentt this
wee
ek where Owners m anaged to
o maximise
e on
opp
portunities with
w reports of 45x ws12
20 being fixe
ed in
the region. The
e reasons ffor this hav
ve been drriven
pure
ely by the limited nattural tonnag
ge in the area,
a
unlik
ke the Med
diterranean where the lucky few have
h
man
naged to find a full sizze stem thiss week. Loo
oking
forw
ward into ne
ext week th
he build-up
p of tonnag
ge in
the region starts again w
we could well
w
see Ow
wners
with
h West Med positions co
onsidering the
t
ballastin
ng to
the UKC, otherrwise a closse eye will be kept on
n the
firming handy market to ffind employ
yment. The 30kt
stem
ms will keep things interresting.
Panamax__________________
__________
With
h strong Caribbean ma
arkets pinning vessels back
b
from
m the ballast over, Owners’ opportunitie
o
es to
con
ntinue to prress last don
ne increase
es. The flexiibility
of sttems will be
e put to the
e test and with
w such lim
mited
ava
ailable tonna
age, barrellling up to th
he Afra or la
arger
will be a valid escape ro
oute, as lon
ng as the West
W
ast option is not requiired. Monday morning
g will
Coa
show
w the true strength
s
in this markett, and if we find
oursselves with a quiet Frid
day, promp
pt tonnage may
startt to questtion how determined
d they are
e to
improve on lastt done. Onlyy time will te
ell.
Dirty Tanker Spot Market Developments - Spot Worldscale
wk on wk
Oct
Last
Last
FFA
change
Week
45
Month
40
Q4 14
52
AG-Japan
TD3 VLCC
TD20 Suezmax WAF-UKC
+15
30th
60
+11
78
67
79
82
TD7 Aframax N.Sea-UKC
+5
105
100
98
109
Dirty Tanker Spot Market Developments - $/day tce (a)
wk on wk
Oct
Last
Last
FFA
change
Week
29,000
Month
18,750
Q4 14
37,000
AG-Japan
TD3 VLCC
TD20 Suezmax WAF-UKC
+19,500
30th
48,500
+6,750
30,000
23,250
27,750
33,000
TD7 Aframax N.Sea-UKC
+3,750
23,750
20,000
16,250
25,000
Clean Tanker Spot Market Developments - Spot Worldscale
wk on wk
Oct
Last
Last
FFA
change
Week
115
Month
100
Q4 14
AG-Japan
TC1 LR2
TC2 MR - w est UKC-USAC
+20
30th
135
+5
146
141
143
115
AG-Japan
TC5 LR1
TC7 MR - east Singapore-EC Aus
+5
134
129
112
118
+1
180
179
182
Clean Tanker Spot Market Developments - $/day tce (a)
AG-Japan
TC1 LR2
TC2 MR - w est UKC-USAC
AG-Japan
TC5 LR1
TC7 MR - east Singapore-EC Aus
wk on wk
Oct
Last
Last
FFA
change
Week
28,250
Month
19,000
Q4 14
+9,250
30th
37,500
+1,000
16,500
15,500
13,750
9,750
+1,000
23,500
22,500
15,250
19,000
-1,000
16,750
17,750
15,250
(a) based on round voyage economics at 'market' speed (13 knots laden/12 knots ballast)
LQM Bunker Price (Rotterdam HSFO 380)
+1
458.5
457.5
542.5
LQM Bunker Price (Fujairah 380 HSFO)
+5
487.5
482.5
562.5
LQM Bunker Price (Singapore 380 HSFO)
+14
479
465.5
555
PAT/SMW/JD/OD/SLK
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