Markets - Bottoming out?

Jan 29 2016


The past week has suffered from the oversupply of tonnage, adding pressure on crude tanker rates.

Despite relatively stable volumes, rates have fallen sharply both in the MEG and also for West Africa/East. A couple of charterers in the MEG have started to ask for Iran loadings, but for the time being, this is not workable for all, due to outstanding issues such as P&I cover, Fearnleys reported.

By the middle of this week, the market appeared to have bottomed out and increased activity may have halted the slide.

As we move in to mid-February fixing dates, the Med-Black Sea market has corrected itself some WS40 points since the beginning of the year for Suezmaxes.

Cargo volume ex Black Sea/Med is limited thus far this year and we need to see more cargoes for it to firm up again. In W Africa, rates were balanced between north and south of WS85 for UK-Cont/Med discharge, but have now dropped another WS5-7.5 points on a West-option cargo. Activity was up in the Middle East as a handful of charterers came out to play in order to fulfill their third week of January requirements.

North Sea and Baltic Aframax markets firmed on the back of a busy couple of days at the beginning of this week, Fearnleys said. Baltic ice market is now looking stronger than non-ice, and a two tier market is expected for the next couple of months with ice in play.

This week, the Med/Black Sea was similar to the week before. Turkish straits were still suffering between four to six days delay, owners were taking on cargoes with minimum earnings, while the position list is unfortunately long.

However, the consolation for owners at this stage is that the market seemed to be at the bottom, there was a steady flow of cargoes, and some owners were looking to ballast out of the Med to take on N Sea cargoes, Fearnleys concluded.

In the charter markets, brokers reported that Varde & Partners had fixed the 2003-built VLCC ‘Energy R’ for 18 months at $45,000 per day, the same rate as Shell reportedly paid for a 12 month charter of the 1999-built VLCC ‘DHT Phoenix’ and Omani interests paid for the 1998-built VLCC ‘Millennium’.

ATC was said to have fixed the 2003-built Aframax ‘Sea Beech’ for three years at $25,500 per day, while unknown interests were thought to have taken the 2000-built Aframax ‘Aegean Legend’ for 12 months at $24,000 per day.  

The LR1 ‘Hafnia Australia’ was believed fixed to Galana for 12 months at $23,250 per day, while the new MR ‘Marie S’ was thought taken by Cargill for three years at a firm $20,000 per day and Mansel was said to have fixed the Handysize ‘Ghetty Bottiglieri’ for six months at $16,000 per day.

According to Platts, two newly delivered tankers were fixed to ship gasoil from South Korea to West of Suez, market sources said.

The recently delivered VLCC, ‘Alice’, on a six-month timecharter from Euronav, is expected to move gasoil to West of Suez from South Korea on its first voyage, brokers in Tokyo and Singapore said late last week. It was thought that either Trafigura or Total had chartered the VLCC.

Market sources told Platts that more similar deals were expected on the back of a contango in the gasoil market and the steady flow of newbuilding dirty tankers due for delivery this year.

Another newbuilding ‘Diligent Warrior’ was thought to be fixed on subjects by Vitol to load a gasoil cargo in early February for a South Korea-UK Continent voyage, at $2.45 mill lumpsum.

Concordia Maritime has confirmed that the company has signed a contract to charter out another P-MAX tanker.

The contract, which comes into effect at the beginning of February, 2016, is for one year with an option for a further year. The contract partner is a UK shipping company.

“We are continuing to take advantage of the strong market by chartering out another of our P-MAX tankers over a longer period. The contract is fully in line with our chartering strategy. We ensure a good level of income for the vessel over the coming year, while balancing the exposure to the spot market in a well-judged way. In a short time, we have now chartered out two of our 10 P-MAX tankers over longer periods and we are evaluating the possibility of similar arrangements,” said Kim Ullman, Concordia Maritime CEO.

Elsewhere, the newly delivered IMOIIMAX MR ‘Stena Imperative’is to sail to Papua New Guinea to load a cargo of vegetable oils for discharge in Barcelona and Rotterdam.

‘Stena Imperative’ is the fifth of 13 tankers ordered by Stena Bulk (10 in 2012 and three in 2015 with an option on a further two).

Four of the vessels - ‘Stena Impression’, ‘Stena Image’, ‘Stena Imperial’ and ‘Stena Important’, were delivered in 2015 and the delivery of the remaining eight vessels, following the ‘Stena Imperative’, will be completed in 2018.

Three of the 13 IMOIIMAX MRs are wholly owned by Stena Bulk, six are owned together with GAR (Golden Agri Resources), two are owned by Stena Bulk’s sister company Concordia Maritime and two are owned by Stena Weco.

TORM has taken delivery of ‘Torm Torino’, the fifth out of six MR newbuildings from Sungdong. The last MR newbuilding is expected to be delivered at the beginning of March, 2016.

In addition, TORM has four LR2 newbuildings on order from Guangzhou Shipyard International with delivery due next year and the second quarter of 2018.

As for newbuildings, two MRs were reported ordered at Onomichi by Eastern Pacific at $37 mill each for dleivery in 2018-2019.

Interests connected with Dynacom were rumoured to have contracted two 58,000 dwt Arc 7 condensate carriers at CSSC Offshore for the Yamal project. They were thought designed by Aker Arctic.

In the S&P segment, the 2000-built LR1 ‘Eagle Ray’ was thought sold to UK buyers identified as Union Maritime for $15.5 mill.

Shanghai-based Greathorse Shipping, part of Tiger Group Investments, was thought to have purchased the newbuilding chemical tanker ‘Scarlet Ray’ from Eastern Pacific Shipping for $30.4 mill.

The vessel is under construction at Japan’s Kitanihon Shipyard and scheduled for delivery in 2016.

The 2014-built MR ‘TRF Oslo’ was reported sold to clients of UACC for $37.5 mill, while the 1999-built Handysize ‘Elbtank Germany’ was sold to unknown interests for $9.75 mill. 

Leaving the fleet were the 1992-built Aframax ‘Jelita Bangsa’ thought sold to Pakistan breakers and the 1991-built parcel tanker ‘ Stolt Helluland’ sold to Indian buyers, both on private terms.

The 1992-buit MR ‘Concertina’ was though committed to Indonesian buyers on the basis of ‘as is’ Batam for $4 mill. She has been laid up for over two years.

 


 



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Gibraltar, ballast, piracy, tank coatings, bunkers