WAF Suezmax market approaches Q3 lows amid Bahri week cooldown

Freight rates in the West African Suezmax segment have softened to near the troughs seen in Q3 2024, with sources pointing to weaker cargo inquiry levels, a significant overhang of tonnage and a general lack of activity caused by many market participants attending the Bahri week event in Dubai.

Platts, part of S&P Global Commodity Insights, assessed freight on the 130,000 mt WAF-UK/Continent at w80, inclusive of EU Emissions Trading Scheme costs, on Nov. 12, down from a recent high of w105 on Oct. 7 and approaching the 11-month low of w72.5 reached on Sept. 26.

"It's been very quiet from West Africa, and it will be a quiet week with all the parties going on -- I don't think the market will crash, but it could still slide a bit," a Europe-based shipbroker said.

"I can't imagine there's going to be a huge amount of activity with everyone gallivanting in the sun [at Bahri week]," a London-based Suezmax broker agreed. "All the [fixtures] done in person won't make it into the market, as they'll stay private."

A second-London based Suezmax broker also stressed that rates in WAF are coming under pressure from softness in adjacent markets, with rates falling in the US Gulf transatlantic sector.

"The market is [bad] everywhere -- the US Gulf is also going to dump aggressively, as will the AG [Persian Gulf], but not as badly," the broker said. "US [tonnage] lists are very long on Suezmax, but what makes it even worse is the number of Aframax ballasters over the past two weeks -- this will completely kill both markets, and we are nearing the lowest [levels] of the year."

Platts assessed freight on the 145,000 mt US Gulf Coast-UKC route at w57.5, inclusive of EU ETS costs, on Nov. 12, down from a high of w97.5 on Oct. 3 and at the same level as the 10-month low it hit on Aug. 12.

Nevertheless, despite the current bearish headwinds, a third-London based Suezmax said that he was still expecting the market to recover closer to the end of the year.

"I still think we'll see rates rise towards the end of Q4 and start of Q1, as we haven't seen any [significant] weather delays yet, which will probably kick in at some point," the broker said. "It doesn't usually take much [momentum] to get things going, although I don't think we'll see the rally we had last year."