Dirty freight rates continued to improve in March with m-o-m gains seen across most monitored routes. VLCCs saw the sharpest increase, rising 45% on the Middle East to East route as renewed buying from China strengthened rates. Suezmax spot freight rates remained at high levels with rates gaining a further 20% m-o-m on the US Gulf Coast (USGC) to Europe route. Aframax rates rebounded from the previous month’s decline, with spot freight rates on the intra-Med route up 23% m-o-m. In the clean tanker market, West of Suez rates rose 29%, supported by a strong performance in the Mediterranean. East of Suez rates fell 10% on average m-o-m amid a winding down of winter product demand in the Far East.
The latest estimates show global spot fixtures continued to recover in March, averaging 16.49 mb/d. Fixtures increased by about 0.9 mb/d or around 5% m-o-m, driven by gains outside the Middle East. Compared with the previous year, spot fixtures rose 1.2 mb/d or around 8%.
OPEC spot fixtures were broadly unchanged in March, averaging 11.19 mb/d. This represents a marginal m-o-m increase of about 40 tb/d or well below 1%. In comparison with the same month in 2022, fixtures were 1.1 mb/d, or about 11%, higher. Middle East-to-East fixtures declined by 0.2 mb/d, or about 3%, to average 6.5 mb/d. Compared with the same month of the previous year, eastward flows from the Middle East gained 0.8 mb/d, or over 14%. Spot fixtures on the Middle East-to-West route also declined in March, dropping 60 tb/d, or about 5% m-o-m, to average around 1.3 mb/d. Y-o-y, rates increased 0.2 mb/d, or almost 14%. Outside the Middle East, fixtures rose 9% m-o-m to average 3.4 mb/d. Compared to the same month last year, fixtures on the route were 0.2 mb/d or around 5% higher.
Sailings and arrivals
OPEC sailings increased in March, averaging 24.1 mb/d. This represents a m-o-m increase of about 0.5 mb/d or just over 2%. Y-o-y, OPEC sailings increase by about 1 mb/d or over 4%.
Middle East sailings averaged 17.8 mb/d in March, representing a neglible increase. Y-o-y, sailings from the region rose 0.3 mb/d, or by about 2%. Crude arrivals saw strong gains in the Far East and Europe, and lesser increases in North America and West Asia. Arrivals in the Far East saw the largest gains, increasing 2.0 mb/d, or 13%, to average 17.6 mb/d. Yo-y, Far East arrivals were 2.3 mb/d, or 15%, higher. Arrivals in West Asia rose by about 0.1 mb/d, or 1%, to average 9.3 mb/d. Y-o-y, arrivals in the region increased 0.9 mb/d, or about 11%. Arrivals in Europe increased 1.3 mb/d, or by almost 12% m-o-m, to average 13.0 mb/d. Compared to the same month last year, European arrivals were 0.1 mb/d or less than 1% higher. Arrivals in North America averaged just under 9 mb/d, marginally higher compared with the previous month and 0.2 mb/d, or about 3%, higher y-o-y.
Dirty tanker freight rates
Very large crude carriers (VLCCs) VLCC spot rates experienced an accelerated recovery in March, gaining 43% on average m-o-m. Compared with the same month of the previous year, VLCC rates were up 108% on average. VLCC markets benefited from a return of Chinese buying of longer-haul grades. On the Middle East-to-East route, rates increase 45% m-o-m to average WS87 points. This was 98% higher y-o-y. Rates on the Middle East-to-West route increased 38% m-o-m to average WS58 points. Y-o-y, rates on the route rose 152%. West Africa-to-East spot rates rose 41% m-o-m to average WS86 points in March. Compared with the same month of the previous year, rates were 95% higher.
Suezmax rates saw a further recovery in March, gaining 17% m-o-m, supported by ongoing trade dislocations. Compared with the same month of the previous year, rates were 57% higher, as Suezmax rates have benefited from ongoing trade flow adjustments which have boosted tonnage mile demand. Spot freight rates on the West Africa-to-USGC route rebounded from the previous month’s decline, gaining 14% to average WS128 points. Y-o-y, rates were 56% higher. Rates on the USGC-to-Europe route continued moving higher, increasing 20% to average WS120 points. Compared with the same month of the previous year, they were 56% higher.
Aframax spot freight rates recovered from the previous month’s decline, with an average gain of 32% in March. Compared with the same month of the previous year, rates were 57% higher. Gains were seen across all monitored routes, except the Indonesia-to-East route, which appeared to bottom out after strong declines in the previous two months. Rates averaged WS187 in March, unchanged from the previous month. Compared with the same month last year, rates were 40% higher.
In contrast, spot rates on the Caribbean-to-US East Coast (USEC) route were sharply higher, gaining 81% m-o-m to average WS346 points. Y-o-y, rates were 107% higher. Cross-Med spot freight rates saw a more moderate gain of 23% m-o-m to average WS222 points. They were 38% higher higher y-o-y. On the Mediterranean-to-Northwest Europe (NWE) route, rates saw a similar gain of 23% m-o-m to average WS200 points. Compared with the same month of the previous year, they were around 37% higher.
Clean tanker freight rates
Clean spot freight rates improved on average, as strong gains in the West of Suez outpaced losses to the East. On average, rates increased 14% m-o-m and stood 17% higher compared with March 2022 levels.
Rates on the Middle East-to-East route increased 11% in March to average WS189. Y-o-y, rates were up just 2%. In contrast, clean spot freight rates on the Singapore-to-East route declined 24% m-o-m to average WS186 and were down 11% compared with the same month of the previous year. Spot freight rates on the NWE-to-USEC route increased 8% m-o-m to average WS227 points in March.
They were 23% higher y-o-y. Rates for the Cross-Med route rose 39% to average WS320 points, while rates on the Med-to-NWE route increased 37% to average WS330 points. Compared with the same month of the previous year, rates on the Med routes were both 33% higher. Clean spot rates continue to be supported by trade flow shifts, with Europe bringing in higher volumes from the Middle East, Asia and the US, while Russian product flows are increasingly headed towards Asia and the Middle East.
Nikos Roussanoglou, Hellenic Shipping News Worldwide