MEG is ‘between months’ and quiet. However, some more West Africa/East cargoes have appeared recently, Fearnleys reported.
There was also renewed interest in North Sea/East cargoes, which will absorb some ships open in the area, provided their subs are lifted.
The total absence of Caribs-USG/East volumes was still hurting the general sentiment.
Rates were generally below last done levels but there was hope of a rise when the August MEG stems start in earnest, Fearnleys said.
Suezmaxes experienced a a busier Med and Black Sea market last week, as Libya came back into play, due to the force majeure being lifted, which helped to create additional cargoes in the area.
Med Aframaxes spiked briefly spilling over into Suezmaxes, which were fixed for a handful of part cargoes, but not enough to drive the market.
West Africa was noticeably quieter for the first decade of August with only a few cargoes being worked thus far. As a result, there is a softer trend developing as tonnage builds up.
We are entering the summer market, which will see activity dropping off and rates sliding. TD20 has fallen to WS67.5 and TD6 was stable at WS85 for now, Fearnleys said.
Aframax activity levels in the North Sea and Baltic remained at a decent level in the July third decade fixing window. Supply and demand on the shipping side is reasonably balanced and we see rates remaining at steady levels going forward, the broker said.
One interesting development this week was that some owners managed to push for a higher premium on the short Baltic discharge options. However, if this new trend will be accepted by charterers is yet to be seen.
In the Med and Black Sea, a softer trend was noted in the past few days. Rates fell quite significantly, despite the re-emergence of Libyan cargoes.
However, a promising week for Libya’s oil sector suffered a set back this week, as the Shahara oil field reduced production due to kidnappings. This led to another force majeure being declared at Zawia, which again led to stem cancellations and a softer rate momentum going forward, Fearnleys concluded.
Recent fixtures reported included the 2018-built LR2 ‘Kastelorizo’ being fixed to CCI for 12 months at $15,500 per day.
The 2018-built Japanese-controlled VLCC ‘Tonegawa’ was believed fixed to Koch for three years at $30,000 per day.
In the MR segment, Maersk Tankers reportedly fixed the 2015-built ‘Stenaweco Andrea Corrado’ for 12 months at $15,000 per day, while NORDEN was said to have taken the 2010-built ‘Maersk Mississippi’ for 12 months at $13,000 per day.
In the newbuilding sector, activity continued.
Somewhat surprisingly, Overseas Shipholding Group (OSG) signed binding contracts with Hyundai Mipo Dockyard (HMD) to build two MRs, due to be delivered during the second half of 2019.
The MRs will be built at Ulsan to comply with MARPOL Annex VI Regulation 13 Tier III standards. In addition, each vessel will have a scrubber installed.
OSG said that it anticipated that these vessels will be used as US flagged vessels in trades served by existing company vessels.
“OSG is committed to maintaining a leading presence in the US flag petroleum transportation sector,” explained Sam Norton, OSG’s President and CEO. “Our initiative to pursue construction of modern, efficient and environmentally responsible vessels sends a strong signal to our customers, our stockholders and our employees that we are confident in achieving our commitment and that we have the resources and unique skill sets to enable us to do so. We look forward to the contribution that these vessels will make to our long-term success once delivered.”
Remaining in the US, Philly Shipyard has signed a non-binding term sheet for the construction and sale of two new Jones Act MR with an undisclosed interest.
They have targeted deliveries of 4Q20 and 1Q21.
If built, the vessels will be very similar to the recently completed series of eight MT-50 class product tankers delivered by the shipyard, although the main engines will be upgraded from Tier II to Tier III compliant.
Two VLCCs were reported ordered at Samsung for $88 mill each for a joint venture between Iraq National Oil Co and AMPTC.
They are due for delivery next year and will be designed to be scrubber ready.
In the S&P sector, Frontline has announced the sale of the 2002-built VLCCs ‘Front Page’, ‘Front Serenade’ and ‘Front Stratus’.
They were believed to have been sold to newcomer ADS for $77.6 mill in total but on long subjects. Should the deal go through, the vessels will be fitted with scrubbers.
In turn, Frontline has agreed with Ship Finance International to terminate their long term charters. Frontline said that it had agreed to pay Ship Finance compensation of $10.125 mill for the termination of the charters.
These transactions are expected to complete during the third quarter of 2018, hence the long subjects mentioned.
Elsewhere, Andros Maritime was reported to have purchased the 2009-built VLCC ‘Bright Harmony’ for $41.5 mill.