Markets - Rates remain firm in all sectors

Dec 07 2018

Another active week for VLCCs with rates ex MEG and WAfrica to East remaining in the high WS90s, yielding about $55,000 per day.

There were attempts to push rates up higher, but healthy returns were hard to ignore, Fearnleys said in its weekly report.


Rates slipped slightly off their peak but the tonnage list was tight and optimism among owners remained. The situation was likely to remain stable and firm for now.


Suezmaxes saw a decline in fixing volume over the past couple of weeks, as inventories were replenished and stocks rebuilt.


Tonnage has steadily built up in the western hemisphere since last week and it seemed that owners were clinging on refusing to allow rates to slip.


However, charterers remained patient and their resolve paid off as rates tumbled, especially in WAfrica where TD20 dipped below WS120, over 25 points below recent highs.


Black Sea business all but ground to a halt with December dates almost covered. Charterers have started to look into very early January for coverage.


Turkish Straits delays remained high, which should prevent a complete rate collapse. TD6 earnings were still at $57,000 per day, which owners will not want to see eroded too much.


As expected, Aframax rates trading in North Sea and Baltic firmed significantly on the back of increased activity, as charterers negotiated forward dates.


This firm trend will continue, as 3rd decade December cargoes out of the Baltic are starting to be fixed. Charterers might also request Ice Class tonnage, adding to the upward pressure.


A slow start to the week in the Med and Black Sea was experienced. However, owners have managed to keep the momentum going, hence rates continued to tick upwards.


WS200 was seen ex Black Sea, with straight cross-Med voyages not far behind achieving around WS190 levels with Tuesday’s TD19 benchmark at WS188.56.


Turkish Straits delays and uncertain itineraries need to be watched closely, giving room for the market to continue its upward trend, Fearnleys concluded.


Illustrating the firming market, brokers reported that BP had taken two 2016-built Suezmaxes for three years at $27,000 per day each.


Vitol was said to have fixed two newbuilding LR2s for two years each at $20,000, Navig8 was believed to have taken a 2016-built LR2 for 12 months, plus options, at $20,500 per day, while ST Shipping was said to have fixed a 2016-built Aframax for 12 months at $16,500 per day.


Trafigura was reportedly active taking a 2009-built MR for six months at $13,650 per day, plus three Handysize tankers for between six and 12 months trading at rates of between $13,000-$14,000 per day. Koch was also thought to have concluded a 2009-built MR for six months at $13,250 per day.


In the S&P sector, Jo Tankers (Odfjell) was reported to have bought two 2010-built MRs for $19.5 mill each. Delta Tankers entered the market and snapped up a Suezmax newbuilding at Nanong Rengshong for $49.5 mill. She is due to be delivered to Delta in September of next year.


Teekay’s 1999-built shuttle tanker ‘Navion Scandia’ was said to have been sold to Monaco interests, Andromeda, while the 2002-built MR ‘Ardmore Trader’ was believed committed to Indian interests for $8.2 mill and Kassian Maritime was thought to have purchased a 2008-built MR ‘Challenge Point’ for $14.25 mill. 


In the newbuilding sector, Ciner Shipping was said to haver contracted two Suezmaxes at HHI for $63.5 mill for 2020 delivery, while Nanjing Tanker was thought to have ordered two MRs at GSI.


Elsewhere, the world's first LNG powered MR - ‘Boris Sokolov’ - designed to ship condensate from Yamal, was recently delivered by GSI to Dynacom Tankers Management.


Yamal LNG had signed a long-term charter agreement with Dynacom for the ship.


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