Markets - VLCC activity softens

Nov 09 2018

After the WS100 VLCC mark was breached last week, the market has taken a breather.

In mainly all of the loading areas, activity has decreased. Charterers with cargoes in hand are carefully picking out their ‘targets’ in order to achieve lower than last done levels, Fearnleys reported. 


With the Chinese fleet appearing to be ‘sold out’ for the remainder of November laycans ex MEG, the anticipation and optimism for more activity to come is strong in the owning community.


Another week of positivity was seen in the Suezmax sector with rates steadily climbing upwards.


West Africa saw healthy cargo and fixing volume, enough to keep the front end of the position list ticking over and sentiment positive. The upward trend is gradual lending itself to potential prolonged sustainability.


Black Sea earnings are pushing close to $50,000 per day, which owners have not experienced for a very longtime. Bosporus delays have been sustained unlike this time last year when they were fairly moderate.


The week ahead looks positive, as December dates beckon and the northern hemisphere winter kicks to further stimulate oil demand.


For Aframaxes, despite owners efforts to maintain current rate levels in the North Sea and Baltic by turning down cargoes and waiting for better alternatives, the resistance was not enough as some owners felt activity could decrease and this would mean less opportunities to fix at decent rates.


As a result, some owners agreed to accept lower rates in order to secure employment for their vessels, and hence a downward correction was inevitable.


In the Med and Black Sea, it has been a very quiet week. The market has calmed down after last month’s rally and we see more tonnage available in the area. This has resulted in a massive drop in rates, and at time of writing (Wednesday), last done from Libya was WS130.


We expect this softening trend to continue as the tonnage list is long, and weather delays have had minor impacts, Fearnleys concluded.


It has been reported that TOP Ships has agreed a new two year timecharter contract with BP for its 2016-built Handysize ‘Eco Revolution’.


‘Eco Revolution’ is currently operated by BP under a three-year charter deal. The new charter will commence in January, 2019 immediately after the expiry of the present charter contract.


The revenue backlog expected to be generated by this fixture is about $10 mill, according to Top Ships.


Koch has been active recently and chartered the 2005-built VLCC ‘Bunga Kasturi Dua’ for six months at $27,000 per day, plus the 2013-built MR ‘Sandpiper Pacific’ for six months, plus options, at $13,000 per day and another two MRs at $14,500 per day for 12 month fixtures. 


Vitol also entered the market picking up two 2010-built LR2s for 12 and six months at $15,750 and $13,500, respectively, plus a 2011 built MR for 12 months at $12,500 per day.


Elsewhere, Chevron was reported to have fixed the MR ‘Nave Orbit’ for 12 months at $12,700 per day.


In the S&P sector, Navigare Capital Partners was said to have paid $31 mill for the 2011-built Suezmax ‘Shamrock’, while Greek interests were said to have purchased the 2003-built Suezmax ‘European Spirit’ for $15.7 mill.


Moundreas was thought to be behind the purchase of the VLCC ‘DS Vida’ for $22.8 mill, while in the Aframax segment, Norwegian interests were believed to have paid $11.7 mil for the 2003-built ‘ADS Oslo’ and Target Marine was said to have splashed out over $24 mill for the 2003/2004 built sisters ‘DS Sophie’ and ‘DS Cathy’.


Two newbuilding MRs at STX were thought sold to Singapore buyers for an undisclosed price.


Maran Tankers was rumoured to have ordered two Tier III Suezmaxes for $62 mill apiece from Daehan for 2020 delivery.


Two options for LR2s were thought declared by ClearOcean also for 2020 delivery, while Matsumoto Shipping reportedly went to Hyundai Vinashin for two MRs.


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