Tanker Market Full Streams Ahead, Says OPEC
The dirty tanker market enjoyed a general improving sentiment in May for vessels in all reported classes on the back of high tonnage demand and increased activities.
Clean tanker freight rates declined on average, mainly as freight rates reported on the West of Suez were weak. In May, OPEC and Middle East sailings were higher month-on-month, as arrivals in all regions improved, except in the Far East.
The higher freight rates were seen on many routes, especially for larger vessels. In May, VLCC spot freight rates experienced an average gain of 15% over the same month in 2014, driven by high tonnage demand and a firmer market in several regions, mainly Middle East and West Africa.
Similarly, Suezmax and Aframax tankers met with higher demand by eastern and western charterers. The increase in chartering activities, combined with tighter tonnage supply, led to an increase in rates seen on a monthly basis and on a larger-scale compared to previous year’s levels.
Clean spot freight rates showed a mixed performance in May. Rates reported a decline, averaging 12% from the previous month, as the market was affected by excess tonnage availability, while the amount of market activity remained insufficient to alleviate the imbalance.
The general improvement seen on the VLCC market was registered mainly towards the second half of the month. Afterwards, the charterer’s trials to halt a further increase in rates paid off and freight rates stabilized as VLCC activities and rates eased off towards the end of the month.
From an annual perspective, VLCC freight rates in May showed a remarkable gain from the same month a year ago.
