More than two thirds of the boats still racing in the Sydney to Hobart are yet to pass the halfway mark, as the frontrunners begin to round Tasman Island in a tight battle for line honours.

Supermaxi Master Lock Comanche is holding on to the lead line honours position, with LawConnect and Scallywag just over its shoulder with under 5 nautical miles between them.

Crews have endured a second tough night at sea, with event co-organiser Cruising Yacht Club of Australia (CYCA) speaking of "bruising" overnight conditions.

"Evidence of [how] hard it was last night is that of the 95 boats that are currently sailing, 75 are still not halfway through the course," CYCA Vice-Commodore David Jacobs said.

Cruising Yacht Club of Australia Vice-Commodore David Jacobs (ABC News)

More than a quarter of the Sydney to Hobart yacht race fleet has retired since the race left Sydney Harbour on Boxing Day.

Vice-Commodore Jacobs said one helmsmen aboard LawConnect had succinctly described the night as "a bit like being on a five-story building and doing a belly-flop into a swimming pool".

"It's been a really bruising, cold, uncomfortable and wet journey for all the sailors."

LawConnect, Scallywag and Comanche are sailing close together. (Supplied: James Ashmore)

'Quite extraordinary' race

Crews have been battling rough seas, sea sickness and damage to boats and equipment.

Of the 128 yachts competing, 33 have retired.

Speaking on Sunday afternoon, Vice-Commodore Jacobs said it remained a "quite extraordinary" race for line honours.

The Scallywag crew said it had "been a tough first two days". (Supplied: Scallywag)

"We've had five boats essentially match-racing all the way down the course since pretty much Sydney heads," he said.

"At this moment, we have Master Lock Comanche in the lead. Only four nautical miles behind is LawConnect and half a nautical mile behind her is Scallywag, and then there's Lucky and Palm Beach XI not far behind them.

"Although Master Lock Comanche is in the lead, by no means is it certain she'll cross the line first."

Damage slows main contenders

Earlier on Sunday, LawConnect skipper Christian Beck said the supermaxis were slowly approaching Hobart in what he described as "very light conditions".

Mr Beck said mainsail damage would make it difficult for his yacht to claim line honours.

"We may as well just keep going and see what happens,"

he said.

But he said a "fairy tale" ending for LawConnect was unlikely.

"It should be an interesting day, I would think, for the race with all three of us in the river," he said.

"We're all in a line now."

LawConnect crew taping sail tears at first light. (Supplied: LawConnect)

Christian Beck of LawConnect said sail damage would make it difficult for his yacht to claim line honours. (Supplied: LawConnect)

LawConnect navigator Chris Lewis said conditions had been "pretty tough".

"It's cold, it's lumpy, stuff breaks — [it's] sort of battle conditions,"

he said.

"Every seven years or so there's a heavy-duty [race] and this one's certainly fit the bill."

The Scallywag crew posted to social media that it had "been a tough first two days racing for the Scallywags and the fleet".

The post described "30+ knots breeze and sea state heavy with rolling 4-metre swells [which] battered the yacht and crew as we lifted off them and crashed down the other side".

"After crossing Bass Strait in the early hours with more of the same finally the Scallywags emerged to lighter conditions with a good luck dolphin escort to see us home," the post read.

Dolphins were seen from the SHK Scallywag 100 boat. (Supplied: Scallywag)

All-female crew First Light shared scenes of a night on board to social media.

"A few issues, a lot of seasickness but we're still going," the post said.

Celestial V70 remains on track to claim handicap honours for the second year in a row.

The leading yachts are expected to arrive in Hobart on Sunday evening.

'The worst is now behind us'

Bureau of Meterology forecaster Jonathan How said conditions would improve for the line honours leaders during Sunday.

"For those heading down the coast of Flinders Island, or even the east coast of Tasmania, we'll see those light winds become more north-easterly during the day," he said.

"That will mean that the boats will be able to have a bit more of a push heading down south towards Hobart.

"We'll see those winds gradually picking up to become north-easterly about 15 to 20 knots, or about 30 to 40 kilometres an hour during the morning."

Hangar Road Hollywood Boulevard crew braving the conditions on Saturday. (Supplied: Sydney Hobart Yacht Race)

Mr How said there was still a swell of up to about 2 metres coming through from the south across the east coast of Tasmania.

For those still along the coast of New South Wales or starting to enter Bass Strait, Mr How said southerly winds of 30 to 40 kilometres per hour, and gusts up to 60 kilometres per hour over the open water, were continuing.

"It could be quite rough out there today but gradually easing up … the worst is now behind us,"

he said.

"It's not until this evening that they will shift to become a little bit more south-easterly and then into Sunday night and Monday morning those winds will also become east to north-easterly.

"So for those further back, they won't get those favourable winds until probably early Monday morning, but then those north-easterly winds will strengthen right across south-eastern Australia."

Comanche is among the top four for line honours. (Supplied: Sydney Hobart Yacht Race)

Smuggler skipper Sebastian Bohm said it had been like "two races".

"The first horrendous part, and then now the fun part," Bohm said.

"We've managed to hold the boat together and now we're just enjoying the sailing."

Smuggler was to the east of Flinders Island about 11:30am Sunday.

Bohm said his crew was pushing hard to beat Callisto, Smuggler's main competitor, and win its division.

More retirements overnight

Just after 1am Sunday, Minerva retired from the race at Eden in southern New South Wales.

Crew member Nicholas Kurta posted on social media the yacht had engine failure and was taking on water, which then shut down its electronics.

"I am proud of this team but disappointed as I feel as if we have let down our supporters from home," he said.

"This race is gruelling and tough as nails, but such a spectacle to be a part of and definitely something I will do again."

Minerva retired in the early hours of Sunday morning. (Facebook: Nicholas Kurta)

Kurta said the crew was "killing it before we had the issue, so it tells me this was still a victory".

He said he was now working out how the crew would get from Eden to Melbourne.

Kraken 42S, Ambition, Chancellor and Le Tiroflan also retired overnight.

On Sunday morning, Titoki, and Loch Sloidh 3 retired.

Flight Mode was headed to Eden for some repairs, but is still racing.

Follow the yachts as they sail for Hobart with the official race tracker.