TC1 and TC5 rates surged by WS17.5 and WS14 points week-on-week to WS115 and WS135, respectively, Ocean Freight Exchange said (OFE).
As many ships were fixed on long-haul voyages from Asia and the Middle East to Europe and Americas, the position list tightened considerably. Furthermore, at least three LR2s were taken for short-term charters ranging from 30 to 90 days to store gasoil this week, boosting firm market sentiment.
Around two LR2s and 10 LR1s are available for loading in the AG over the next week, OFE said.
US refinery outages, as a result of Hurricane ‘Harvey’ left Europe with no choice but to pull diesel and jet fuel from Asia and AG to meet the supply gap. EIA data indicated that weekly US diesel exports hit a six-year low of 739,000 barrels per day for the week ending 1st September, greatly reducing flows to Europe.
About 1.84 mill tonnes of middle distillates for September loading in Asia and the Middle East have been tentatively booked with an option for delivery into Europe thus far, underpinning the strength in LR rates.
In comparison, around 3 mill tonnes of middle distillates were shipped from Asia and the Middle East to Europe for August loading following the fire at Shell’s Pernis refinery.
Diesel supplies in Europe were tight. PJK data indicated that gasoil inventories in the ARA region for the week ending 7th September were 20.4% lower year-on-year at 2.74 mill tonnes. The gasoil EFS hit its lowest for the year at -$18.99 per tonne last Friday, as the East-West arb became increasingly profitable, OFE concluded.
As for the crude sector, demand for VLCCs dwindled over the past week ex MEG, as charterers remained in control backed by a more than an ample list of available tonnage, Fearnleys said.
It seems no help to the beleaguered market that owners are ballasting from Far East to the Atlantic on spec. Under pressure on all fronts.
The Suezmax market experienced a quieter period after the recent frenzy of fixing. Charterers have been taking a more measured approach resorting to drip feeding the market keeping rates in check.
TD20 peaked at WS75 giving owners meagre returns of close to $10,000 per day, whilst TD6 found its level at WS85 for end month loading dates. Interestingly, even after the hurricane devastation in the region the US Gulf and Caribs market saw fairly significant volume with demand up in the east.
Overall predictions are for a steady week ahead and with early October dates upon us, the fourth quarter beckons, Fearnleys said.
As expected, rates for Aframaxes trading in the North Sea and Baltic increased further this week. A busy 3rd decade loading programme coupled with a more balanced list in owners favour pushed rates upwards.
As the US crude (WTI) is quite cheap, compared with Brent, we could see more vessels coming into the area from the US as the arb seems wide open. However, the current firm trend will continue, as bad weather in the North Sea could cause some vessels being delayed and as such, adding to the upward pressure currently being experienced.
In the Med and Black Sea, owners are once again earning some well-deserved dollars. Libyan volumes did not let the market down and a lot of changes and confusion in the Black Sea programme made it the perfect situation for hungry owners.
We are at the time of writing (Wednesday) seeing rates of up to mid WS120 with demurrage almost touching $30,000 per day. More good news, there are still cargoes to be fixed and few ships to play with, Fearnleys concluded.
In the charter market, TOP Ships announced that upon her delivery from Hyundai during 3Q18, ‘Eco Palm Desert’ will enter into timecharter employment with affiliate Central Ship Chartering for three years.
The charterer has the option to extend the charter period by another two years. The company said that it expected total gross revenue backlog associated with this timecharter of up to $27.5 mill, including the option periods.
TOP Ships also said that it has entered into a $23.5 mill bank loan facility with a European bank for the vessel’s financing.
Evangelos Pistiolis, TOP Ships President and CEO, said: “The total gross revenue backlog for the fixed charter period of all of the company’s operating fleet stands at about $106 mill and when adding the 50% of our joint venture vessels it increases to about $122 mill, with cashflow visibility reaching into 2021.
“Our business strategy continues to be focused on further expanding our fleet as it is important that we achieve a certain critical mass in terms of fleet size with an aim to maximise our operational efficiencies and synergies,” he said.
Elsewhere, Concordia Maritime has signed a contract to charter out the P-MAX ‘Stena Provence’.
The contract is for one year, with an option for a further year, and runs from mid-September 2017. The contractual partner is one of the world’s largest oil and gas companies, Concordia said without naming the charterer, but believed to be Total.
‘Stena Provence’ had previously been used by the same customer for consecutive shipments of refined petroleum products, mainly in the Asia/Pacific region.
This is the second timecharter contract for Concordia Maritime in recent months. A similar contract was signed with the same customer in June for the P-MAX ‘Stena Paris’.
“It’s always pleasing to be given a renewal of confidence. Long-standing customer relationships are one of the cornerstones of our strategy. Given the challenging market conditions, we are pleased with the level of the contract. But what’s really important here is maintaining a long-term perspective and continuing our partnership with one of the world’s largest oil companies,” said Kim Ullman, Concordia Maritime. CEO.
The market for transportation of oil and refined petroleum products has been weak during recent quarters. However, several factors point to a brighter future.
“The world economy is in good shape and global oil consumption is expected to increase by about 1.4 mill barrels per day in the coming year. Looking at stock levels of oil around the world, they are now gradually decreasing, primarily as a result of OPEC’s output cuts – which will benefit shipping companies like us in the period ahead.
“On the supply side, orderbooks are low and net growth in new MR vessels is only expected to be about 1-2% in 2018. Overall, we expect these factors to lead to a progressively stronger market starting in 2018,” Ullman concluded.
Brokers reported that Winson Oil had fixed the Aframaxes ‘FPMC P Ideal’ and ‘Haima’ for 60-90 days timecharter at $19,000 per day.
The 2017-built Suezmax ‘Ottoman Sincerity’ was believed fixed to Vitol for 12 months at $14,000 per day
In the S&P sector, Cardiff (TMS Tankers) was said top have purchased the 2016-built Suezmax ‘Tara’ for $51 mill, while Spring Marine was thought to be behind the purchases of the 2003-built Aframaxes ‘Neptune Voyager’ and ‘Stellar Voyager’ for $10.2 mill each.
At a ship-to-ship transfer seminar this week, TMS’ Capt Apostolos Mavrives said that the fleet stands at 43 tankers, would be 45 next week and 50 plus by next year.
In addition, the 1999-built MR ‘Vega’ was believed committed to undisclosed interests for $6.5 mill.
Hellespont was reported to have sold three 2007-built LR1s for $42 mill en bloc. The buyer was not disclosed.
In the newbuilding sector, DSD was said to have declared options for two MRs at Hyundai Vinashin at $32 mill each.