South East Asia CPP Market Report

South East Asia CPP Market Report

Singapore MR tonnage long but Australia pull and under-radar fixing activity point to measured support.

Far East MR vessel supply in the Freight Supply and Demand (FSD) model’s 7-day ahead window stands at 28 ships against a 90-day moving average of 23, placing prompt availability 5 vessels above average. Incremental demand registers at just +1 vessel, leaving the supply signal mildly bearish on a raw count basis. The North Asia component of the list is contributing to this length, with enquiries dwindling there as export restrictions continue to weigh, and rates in the North are expected to soften further as a result. Far East open MR counts doubled over the last week while SEA counts trended sideways.

The Singapore market tells a different story. Activity started the week on a busier note, though most of the fixing has been under the radar. Australia ballasters are repositioning towards Singapore, keeping the headline open vessel count elevated. This reflects owner preference for SEA-loading employment over the long-haul repositioning alternatives. North Asia is not an attractive ballast destination currently.

Singapore-loading arb routes remain closed across the curve. Singapore to Rosarito gasoline is negative from April through July, Singapore to Dar-es-Salaam diesel is deeply closed across the same period, and Singapore to Durban diesel offers no relief either, with margins negative throughout. The absence of open arbs limits the structural case for incremental cargo demand and term business is the main driver of fixture activity. However, the Australia resupply trade continues to generate genuine fixture activity independent of arb signals. Note that arbs loading out of the FE (Ulsan & Yoko) are similarly shut with Ulsan to Sing diesel arb not opening until June pricing.

Fixture activity over the past three days reflects this dynamic clearly. FPMC 27 was fully fixed loading Singapore for Australia at WS ~315 for a 9 April laycan, and STI Opera is on subs on the same routing at WS 320 for a 14 April laycan, both for gasoline and clean cargoes respectively. STI Marshall was fully fixed loading Singapore for Australia in the same window. LS Neptune fixed loading Singapore for Jakarta, and Maritime Valor fixed loading Singapore for the Philippines, confirming that shorter-haul intra-regional demand remains active alongside the dominant Aus flow. The FSD model forecasts only a marginal rate improvement from WS 320 to WS 323 into the 13–22 April load window.

The ceasefire proposal now circulating between the US and Iran warrants close reading but should not be mistaken for a genuine resolution. The 10-point Iranian plan includes conditions: continued Hormuz control, uranium enrichment, sanctions removal and financial reparations that are untenable for the US and Israel. The more probable interpretation is that both sides are buying time, avoiding further infrastructure devastation and artificial deadline pressure rather than reaching a durable agreement.

For freight markets, the near-term impact is likely negligible: there is insufficient detail and no market confidence to materially shift the product supply dynamics that have defined respective load regions since the conflict began. Neil Crosby noted this morning that if this view is correct, various parts of the market have already overcorrected on the ceasefire headlines, including forward gasoil cracks and Singapore product East/West spreads, which look too weak given the supply chain damage that is already baked in for weeks if not months.

With the tonnage counts in SEA above average, but with genuine fixing activity continuing under the radar, and the Australia resupply trade providing a structural demand floor, the TC7 outlook is range-bound in the near term. Charterers and owners have leverage in this market and rates and fixtures should be concluded on a case-by-case basis.

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