TCE earnings were well below opex costs and tonnage oversupply East of Suez was holding rates in check. Cargoes were trickled into the market place, as charterers were in no rush to cover their requirements.
The Caribs market saw stronger rates last week, but activity has since tailed off, partly hampered by Hurricane ‘Harvey’.
Suezmaxes experienced limited activity leading up to the holiday weekend. Expectations are the market will see an impact from ‘Harvey’, as ships are being held in the region. Both the Caribs and WAfrica lists were expected to reflect the lack of dates for certain candidates going forward, which could cause a squeeze effect and push rates up, Fearnleys said.
TD20 was hovering around the WS60 level for the past week with earnings down to around $4,000 per day.
The Black Sea was slow in showing 2nd decade dates and it was thought that volume will pick up over the coming week.
The week ahead has signs of a market set to turn the corner, as currently charterers have resorted to stealth tactics in order to secure the best tonnage for their requirements before the flood gates open.
Aframaxes in the North Sea and Baltic did not enjoy a cargo rush prior to the bank holiday weekend and as a consequence, rates remained unchanged. Rates should stay flat going forward and spot ships might ballast to the firming Caribs market, which would make the position list in Europe a fraction better.
In the Med and Black Sea, the uncertainty around Libya production is still in play, but thus far, ships fixed will be able to load. ‘Harvey’ could make west Med-positions ballast across, however this was yet to be seen.
We believe that a minor jump in rates is achievable, but the market will continue to be cheap for charterers, and will not make a huge difference for an owner, but at this point it is all about principal, Fearnleys concluded. .
In the charter markets, Capital Product Partners confirmed that it had secured new timecharter employment for one MR and two Handysize tankers.
The 2015-built MR 'Amadeus' was fixed to Repsol Trading for one year (+/- 30 days) at a gross daily rate of $14,500 with an option to extend the charter for an additional year (+/-30 days) at a gross daily rate of $14,750. The new charter will commence in October, 2017.
The two Handies were the 2006-built 'Aktoras' and the 2007-built 'Aiolos' were chartered to Capital Maritime & Trading Corp ('Capital Maritime') for 10-12 months at $11,000 gross per day plus 50/50 profit share on actual earnings settled every six months.
Both vessels have been trading on voyage or short timecharters, following the expiry of their employment with BP Shipping at the end of the first quarter of 2017. The new charters are expected to commence this month.
Other charters reported by broking sources included IOC fixing the VLCCs ‘Kalamos’ and ‘Kymolos’ for two years, the former for $24,000 per day, while the latter’s rate was not disclosed.
Another VLCC, the 2004-built ‘Mediterranean Glory’ was taken by Koch for two years, p;us options for another two years, plus a further 12 months.
Two new Suezmaxes were fixed to Vitol for 12 months, plus a 12-month option, at $24,000 per day. These included an unnamed newbuilding plus the 2017- built ‘Ottoman Courtesy’.
The 1996-built LR2 ‘Morning Glory’ was reported fixed to PDVSA for 12 months at $21,950 per day, while the MR ‘Silver Point’ was reported fixed to Transalba for 12 months at $14,500 per day.
In the S&P market, the 2003-built ‘Gener8 Pericles’ was said to have been sold to Greek interests for $11 mill, while the 2003-built LR1 ‘Tanja Jacobs’ was believed sold to Coral Shipping and the 2002-built MR ‘Epiphony’ was thought sold to IMS for $8.25 mill.
Pantheon was believed to have agreed an LOI for two, option two, MRs with STX for $33 mill each and for 2019 deliveries.
Turning to the demolition sector, carrying on from last week, a raft of impressive sales (mostly into Bangladesh) confirmed a sub-continent recycling industry still on the up this week, as over bullish cash buyers continue to take increasingly speculative positions on any available vessel, GMS said in its weekly report.
Local steel plate prices too have started to level out in both India and Bangladesh and an increased supply of tonnage is starting to take effect, as many of the available and prime buyers (especially in Bangladesh) are gradually being booked up with the choice units.
Upcoming Eid holidays this week will certainly put a dampener on the proceedings with many hoping that prices and sentiment continue their upward trajectory post Eid break.
In a series of large ldt fixtures, several VLCCs (sold ‘gas free for man entry‘ only with cash buyers taking the risk for cleaning to ‘hot works’ standard) were committed this week, as shipowners continue to exploit the impressive prices available.
There are rumours from from Gadani that tankers may be permitted to enter Pakistan again (with more stringent ‘hot works’ requirements, as mandated in both India and Bangladesh) from next month.
Among the vessels reported sold for recycling were the 1995-built VLCC FSO ‘Jade Palms’ sold to Bangladesh for $383 per ldt and the same vintage VLCC ‘Maran Centaurus’ also sold to Bangladesh interests for $404 per ldt, on the basis of ‘as is’ Singapore, gas free and with 300 tonnes of bunkers ROB.