*VLCC Markets Starts to play Catch up*
The month of November has seen bullish momentum in bunker prices as the world economy is slowly coming back online. Looking at the Ship and Bunker global 20 port average VLSFO prices, the start of November was at 318.50$/mt and the last day of November saw prices up at 386.50$/mt, a healthy 21% increase on the month, leading to an increase in vessel owners costs.
With an average TD3C round trip voyage from Ras Tanura to Ningbo taking around 50 days, there’s now a greater risk element that bunker prices continue to rise throughout the length of the voyage, increasing owners costs. With bunkers being the main cost component of freight rates, we are likely to see an increase in freight rates, in line with bunker movements, driven by owners mitigating any potential loss in earnings linked to the increasing bunker costs. This gives owners a firm foothold and argument to back their demands for some much needed higher rates for the first time in a while.
As Martin Luther King, Jr. once said “There is power in numbers and there is power in unity” therefore; if owners are able to collectively push for higher rates it will be to their combined benefit, we may see rates improving. Looking at TD3c spot throughout November, it could best be described as slow and steady…. Starting the month at ws25.58 and finishing it marginally higher at w28.94. Hopefully, the momentum starts to snowball and we see further improvements in the market. (FIS, Ship&bunker, ICE)
*Tanker Troubles *
Throughout November we saw a few events that have endangered tankers. On the 25th an Aframax was damaged in the Red Sea while leaving berth, when a suspected sea mine exploded puncturing a hole in the vessel just 1 metre above the waterline. Authorities are still unsure as to whether it was a direct attack or a ‘freak accident’ due to an old sea-mine. There seems to have been a slight uptick in West-African pirate activity in November with numerous attempted hijackings throughout the month. This is more than likely linked with this time of year bringing a drier climate and more favourable seafaring conditions. Unfortunately, just last week product tanker Agisilaos came under-attack in West Africa, where 4 of the crew have been kidnapped by six armed pirates forcing entry onto the vessel. At current, there are no reports of injury but there has been no further news on the 4 kidnapped seafarers. In worrying statistics, this marks the 24th confirmed kidnapping in the Gulf of Guinea this year with a total of 122 kidnapped from vessels. (Bloomberg, Splash247, Tradewinds)