Rate levels were at or just below OPEX with no change expected in the near term. Only an increase in activity ex Caribs was recorded, but this did not have an impact on rates for the other main VLCC routes, Fearnleys reported.
From an owners perspective, the Suezmax market sentiment thought that we were now at the bottom of the trough. The past week saw fairly sparse activity in West Africa with the focus being on 1st decade September dates. TD20 went marginally down to WS62.5.
September dates for the Black Sea first decade have yet to be shown in earnest. There was sporadic action for east destinations but little momentum to stimulate owners and rates hovered at WS75 for TD6.
In addition, the Mediterranean was light on volume with TCEs hovering around $7,000 per day for a cross-Med voyage at WS80.
The outlook for the week ahead is steady across the board and expectations are for increased cargo activity.
Baltic and North Sea markets continued moving sideways from last week with a minor upward adjustment seen on TD7. Charterers were being more creative in terms of undertaking non-traditional voyages and owners were doing their utmost to keep their ships moving in order to minimise losses and maintaining their approvals.
In the Med and Black Sea, we continued on the same dull track, as the week before. Owners were fixing in the red and the increasing tension in Libya was not helping the situation, Fearnleys said.
We should see some more activity out of Black Sea in the next 10 days, but there is still a long list of ships waiting for employment, so rates should stay around bottom levels going into next week, Fearnleys concluded.
Moving East, the recent strength in the Asian LR tanker market has trickled down into the MR segment, Ocean Freight Exchange (OFE) said.
The MR market firmed lately on the back of busy activity and tight vessel availability in all key regions - AG/West Coast India (WCI), Singapore and North Asia.
In the AG/WCI market, firm demand for short haul voyages within the region and East Africa runs, as well as a tight tonnage list, underpinned MR rates, OFE said.
Rates for the key AG/Japan route jumped by WS5 points week-on-week to WS155.
Tender data indicated that Tanzania and Kenya were importing around 1.01 mill tonnes of diesel, jet/kerosene and gasoline in August, up from 503,000 tonnes in July. In line with the growth in CPP imports, rates for an AG/EAF run, basis 35,000 tonne cargoes, surged by WS22.5 points month-on-month to WS197.5.
Vessels in Singapore have been ballasting over to the AG/WCI region, due to bullish market sentiment, as well as higher earnings, which in turn has tightened prompt tonnage and pushed up MR rates in Singapore, buoyed by higher gasoline imports into Indonesia.
Rates for a Singapore/Australia trip, basis 35,000 tonnes, grew by WS6 points from last week.
As reported by Platts, Pertamina is expected to import up to 9.8 mill barrels of gasoline in August, up by 13% month-on-month. Planned maintenance at Pertamina’s 125,000 barrels per day Balongan refinery and 348,000 barrels per day Cilacap refinery in September has led to the oil company seeking six spot cargoes totalling 740,000 tonnes for September lifting.
A flurry of third decade August cargoes boosted the North Asia MR segment, supported by a few cargoes fixed to Australia after the unexpected outage at BP’s 146,000 barrels per day Kwinana refinery.
Rates for a South Korea/Singapore, basis 40,000 tonnes, jumped by $30,000 from last week. North Asian refiners have been running at high utilisation rates on the back of peak summer seasonal demand and robust Singapore complex refining margins, which are at their highest since end-2016.
South Korea’s refinery runs grew by 10.9% month-on-month and 3.9% year-on-year to 3.1 mill barrels per day in July.
With outstanding first decade September cargoes and a shorter position list in the Far East, owner resistance is expected to keep the rally going for now, OFE concluded.
In the charter market, TEN announced that it had chartered two suezmaxes to a US operator for three years, bringing the number of vessels chartered to the US company up to six. Broking sources thought that the charterer was Koch.
The latest charters are scheduled to commence in early September upon completion of the current employment of each vessel and contain profit sharing arrangements, TEN said.
"We are pleased that these new charters not only solidify the company's cash generating ability and visibility, but also emphasise the fleet's competitive advantage when seeking to secure charters with high quality oil concerns," said George Saroglou, TEN’s COO. "With more than 75% of the fleet in secured employment, resulting to $1.5 bill already in minimum secured revenues and the possibility of generating considerable additional income through profit sharing, we are very confident that TEN will be one of the prime beneficiaries going forward once we enter the seasonally stronger fourth quarter and beyond."
Brokers reported that IOC had taken the locally-controlled VLCC ‘Lavails’ for two years at $24,000 per day.
They also said that the two NAT charters reported recently involved the Suezmaxes ‘Nordic Star’ and ‘Nordic Space’ built 2016 and 2017, respectively. They were committed to Shell for 18 months at the equivalent of TD20.
Navig8 was reported to have fixed the 2004-built sister Aframaxes ‘Sparto’ and ‘Pantelis’ for 15 months for $12,000 per day each. The 2008-built ‘LR2 Pioneer’ was thought fixed to ST Shipping for 12, option 12, months at $14,500 and $16,500 per day each.
In the MR segment, ExxonMobil was reported as fixing the 2006-built ‘High Venture’ for 12 months, plus 12 months option, at $13,250 per day, while the 2012-built ‘Kourion’ was said to be fixed to NORDEN for 12, option 12, months at $13,250/$14,250 per day.
In the S&P sector, the 2003-built Aframax ‘Amba Bhavanee’ was believed sold to undisclosed interests for $4.8 mill. She has been laid up for 4.5 years and her class has expired.
The 2005-built Handysize ‘Torm Fox’ was thought sold to Indonesian interests for $10.7 mill.
In the newbuilding sector, the IMOIIMAX newbuilding sisters, ‘Stena Imperator’ and ‘Stena Imprimis’ were named at Guangzhou Shipbuilding International (GSI) in Guangzhou.
They represent the 11th and 12th, in a series of 13 identical tankers ordered by Stena Bulk. The last IMOIIMAX tanker will be delivered in January of next year.
“It was a spectacular sight with the two sister tankers beside each other and the somewhat unusual situation, as such made the naming ceremony a bit special and extra festive. We are now approaching the final delivery of our large order consisting of 13 IMOIIMAX tankers. We are very proud of and satisfied with our fleet, which now consists of ten units in operation. Both the technical and the commercial concept have proved to be very successful,” said Erik Hånell, President & CEO, Stena Bulk.
‘Stena Imperator’ will be delivered next week and the delivery of the ‘Stena Imprimis’ is expected to take place in about two months. On her maiden voyage, the ‘Stena Imperator’ will sail with a cargo of vegetable oil to Papa New Guinea and then to Rotterdam.
The two tankers will be operated by Stena Bulk’s product and chemical operation and will sail in its global logistics system, which currently employs some 60 vessels.
Elsewhere, Piraeus-based Petrogress, through its Petronav subsidiary, said it is planning to add more tankers to its fleet aimed at West African business.
It said in its second quarter results statement: "Petronav is currently exploring opportunities to expand its operations by identifying and acquiring additional vessels to expand its tanker fleet under management."
The company currently manages four tankers.