Markets - VLCC trades back to normal following attacks

Jul 05 2019


A lacklustre week in the VLCC segment with rates remaining under pressure, especially in the MEG.

With the dust having settled from the recent attacks, trade is more or less back to normal, barring insurance premiums, which by and large are being picked up by charterers, Fearnleys said.

 

High WS40s is now the benchmark rate eastbound for unrestricted modern tonnage from all loading areas, yielding around $20,000 per day TCE.

 

Current loading dates are behind the curve, giving some hope that activity could pick up, although a lot of ‘off market’ fixing is clouding the supply/demand picture short term.

 

As for Suezmaxes, last week we saw increased activity in both West Africa and MEG.

 

Rates have been stable in MEG since the attack, and with the 30-day tonnage count looking decent, we expect rates in this area to remain stable, the broker said.

 

In West Africa, we saw rates ticking up at the end of last week, but ballasters from the east put downward pressure on this market, pushing rates back in the mid WS60s.

 

Going forward there is a potential for owners to get some decent rates from Black Sea, as last done to South Korea was $3,400 per day, with a massive 3rd decade programme to come.

 

Another week has passed by in the Aframax segment with the North Sea and Baltic market, as well as the Mediterranean and Black Sea, moving sideways.

 

Ships have one by one picked off the stems coming into the market frequently enough to maintain rate levels through most of the week.

 

However, while the Mediterranean and Black Sea markets have seen a slight downwards correction the last day or so, we have seen an uptick in rates ex North Sea and Baltic, as owners put up a little more resistance in a tighter window and take the opportunity to ask for a few more points.

 

One to keep an eye on in the week to come, is a seemingly healthy cargo programme ex Black Sea, as we move closer to the 3rd decade fixing window, Fearnleys concluded.

 

In the VLCC period market, quiet conditions were seen this week following a spate of three year charters reported recently, Alibra Shipping said.

 

In the clean segment, interest remained in longer period MR business.

 

At OPEC’s Vienna meeting, it was decided to extend the supply cuts to 2020 in a bid to boost oil prices, Alibra sad. 

 

Brokers reported that a DSME newbuilding was fixed to Trafigura for three years at $38,000 per day, plus options.

 

Repsol was said to have fixed the 2012-built Suezmax ‘Colorado’ for a short period of between one and three months at $20,500 per day.

 

In the newbuilding sector, Yasa was said to have ordered two MRs at Hyundai Mipo for 2021 deliveries.

 

In general, newbuilding orders dropped to record lows in the second quarter of this year, according to VesselsValue's head cargo analyst, Olivia Watkins.

 

The total number of tanker orders was down 47% for the first half of 2019, compared to the same period in 2018.

 

Countries leading the way in terms of number of orders are Greece and Singapore.

 

The Greeks have been ordering tankers ranging from VLCCs down to MR2s with 90% of the orders placed at South Korean yards. 

 

Hyundai Mipo received the biggest influx of MR2 orders placed since the beginning of the year with 23 of the total 33 MR2s placed at HMD, a whopping 70%.

 

VLCC orders were down 60% for 2019 year to date, compared to the same period in 2018, despite seeing a good winter for rates.

Ocean Yield has announced that it has taken delivery of the VLCC ‘Nissos Santorini’.

 

She was delivered from Hyundai Heavy Industries and is the third in a series of four VLCCs that will be delivered to the company this year.

 

Upon delivery, the vessel commenced a 15-year bareboat charter to Okeanis Eco Tankers Corp.

 

Okeanis Eco Tankers was established in 2018 by the Alafouzos family to take over its fleet of modern tankers and tanker newbuildings.

 

With seven tankers built 2015 to 2018 and eight VLCCs for delivery in 2019, the company will focus on eco-designed vessels fitted with scrubbers, it said.

 

Elsewhere, Thun Tankers took delivery of the second L-class, ‘Thun London’, in China on 2nd July.

 

The 18,650 dwt product tanker is the second in a series of five to be built by Avic Dingheng Shipbuilding in China.

 

The L-class tanker was designed and developed in-house.

 

Like her sister ship, ‘Thun Lidkoping’, the new tanker will enter into the Gothia Tanker Alliance network with crewing and technical management undertaken by MF Shipping Group.

 

In the S&P market, the 2007-built VLCC ‘Phoenix Vanguard’ was reported sold to Hermes Marine Management for $38.5 mill. She is scrubber fitted.

 

The 2004-built Aframax ‘Pytheas’ was said to have been sold to Norwegian KS company Smart Energy.

 



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