Markets - VLCC fixing volumes rising

Sep 13 2019

Increased VLCC volumes were seen last week predominantly in the MEG.

The monthly count sharply increased with close to 1,450 deals done, and it still feels as though there are more to come, which will make September a busy month, Fearnleys said in its weekly report.

October’s West African programme is also well under way, and with a tightening tonnage list there are some encouraging signs for owners. Rates are off the bottom as a couple of points were added on the major routes.

Owners are again more resistant and are carefully picking out their preferred voyages, as these may be the last for the year. In general, optimism has returned to the owning community and rates are under upward pressure, as the end of the year approaches.

However, Suezmaxes were still in the doldrums, as the supply of tonnage in all the markets was ample. Hurricanes and bad weather in the Americas managed to rock the boat slightly last week, but it seemed that this market had plateaued, as ships were ballasting from UK/Cont-Gib to compete with local tonnage, the broker said.

On a positive note, overall the activity level was good, but there was an overhang of ships in the Atlantic and this needed to be absorbed before any upward rate trends are seen.

Aframax rates in the Baltic and North Sea continued to firm, to the extent that some routes ex Baltic rose by around WS20 points during the the week.

There is a healthy amount of activity on the cargo side at present, and positions were still tightening, so a firmer market was expected for the remainder of the 3rd decade of September.

In the Mediterranean and Black Sea, flat market was seen this week with TD19 fixed at low to mid WS90s.

However, a number of vessels have sailed for the North or US Gulf, so the position list was tightening in the Mediterranean. Fearnleys said that it expected the market to bounce back somewhat in the week to come.

Little activity was seen in the crude period market this week, said Alibra Shipping, although rates have remained stable.

The clean period market saw signs of activity with the average MR rates rising to $15,250 per day.

Oil prices rose this week, as OPEC member Iraq commented that the organisation would consider further output cuts, as a result of demand growth concerns, Alibra concluded.

Arguably the deal of the week, if confirmed, is Capital’s LOI for 10, plus four optional dual fuel VLCCs at Hyundai for 2021 onward delivery.

Brokers said that the price per ship was $110 mill.

In addition, Neda Maritime was said to have ordered a VLCC at Hyundai Samho for 2021 delivery for $92 mill.

Hyundai was also said to be the recipient of an MR order from Masumoto Shipping.

In the S&P sector, MRs were the flavour of the week with at least three elderly units reported changing hands.

The 2004-built ‘Energy Protector’ was said to have been sold for $11 mill, while the 2002-built ‘Ceylon’ was believed picked up by Seven Islands for $7.7 mill and the 2000-built ‘Global Marine No 10’ reportedly changed hands for $6 mill.

Returning to the charter market, undisclosed interests were said to have fixed the 2002-built Suezmax ‘Supreme’ for 12 months plus options at $22,500 per day, while Vitol was said to have taken the 2007-built LR3 ‘SKS Sakura’ for 12 months at $25,500 per day, possibly for storage duties.

The 2018-built Aframax sisters ‘Crudesun’ and ‘Crudemed’ were said to have been fixed to Navig8 for six months, plus option, for $22,500 per day each.

Two Chengxi newbuilding MRs were thought fixed to Bahri for three years at a firm $18,000 per day, while Stena Bulk was believed to have picked up the 2007-built MR ‘Maersk Mediterranean’ for 12 months at $15,000 per day.  

In the US Gulf, Eagle Ford Terminals Corpus Christi has received its first vessel at its new dock located on the Corpus Christi Ship Channel.

The joint venture between Plains All American Pipeline and Enterprise Products Partners said that the vessel commissioned the new terminal on 10th September.

Corpus Christi is currently the third largest US port in total revenue tonnage terms and is forecasting exports of nearly $15 bill of crude oil this year.


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