October is shaping up to be a slower month for crude tankers, as the spot market cools ahead of September’s end.
Fearnleys said VLCC rates took a dip over the last week even as nominations topped 240 and fixtues neared 100, dragging suezmaxes down with them.
“A couple of quiet days and the tide can turn,” the Norwegian shipbroker said in its weekly report.
Fearnleys said time charter equivalent returns were in the $80,000 per day range, prompting the profit-taking from owners.
The broker said the rate for VLCCs sailing west from the Middle East slipped five Worldscale points over the past week to reach WS 50 on Wednesday.
A VLCC headed to Japan from the Middle East saw its rate fall 7.5 points to WS 92.5, while the cost of a voyage to Singapore fell nine points to WS 93.5 over the same period.
The WorldScale lower rates were softened by lower bunker prices, Fearnleys said.
Data from Tankers International showed that Shell booked the 300,000-dwt Babylon (built 2020), which is operated by Koch Industries, on Wednesday for just under $69,100 per day for a voyage from the Middle East to China.
That is better than the $66,800 for a similar voyage a week earlier.
The broker also published figures showing the number of VLCCs in the Middle East Gulf available in the next 30 days jumped by five to 140, while the number of weekly fixtures dropped by three to 52.
“October is looking a lighter month, perhaps unsurprising after a near-record cargo count in September for overall VLCC fixings driven by the [Middle East and US Gulf Coast],” the broker added.
Fearnleys said suezmax rates were being driven by VLCC sentiment and that “without this very tenuous link the pure fundamentals of this market, at least in the ultra-short term, are weaker”.
The broker said the Black Sea route has cooled off after the first decade, leaving several vessels in the region looking for work.
Those ships will either grab cargoes out of the Mediterranean or, as Fearnleys suggested the majority will do, head to West Africa.
“The East is similarly fundamentally weak and in need of further enquiry to maintain present levels,” the company said.
Even with the recent dips, the market remains at elevated levels, with all spot routes measured by Fearnleys for VLCCs considerably higher than for most of the last 12 months.