Consequently, rates are under severe attack whenever charterers decided to negotiate and have softened both for East and West destinations, Fearnleys said in its weekly report.
W Africa/East also remains docile, which adds to the tonnage availability. Some more Caribbean/East activity was seen, but rates here were also soft although they kept vessels from ballasting elsewhere.
The entire VLCC segment is lacking in momentum and rates could soften further from present levels, the broker said.
After a long period of rates scraping along the bottom, Suezmax owners are now in the driving seat, though for how long remains to be seen.
A rush of enquiries in West Africa coupled with multiple cargoes loading US Gulf for east destinations saw rates in West Africa rise from WS35 to WS42,5 at the time of writing (Wednesday) for UK/Cont-Med discharge range.
Long-haul voyages were also booked from Med/Black Sea, which will reduce the ample tonnage availability. MEG cargoes were being fixed steadily, but rates could easily move up, if the level of activity in the Atlantic basin continues, Fearnleys said.
The North Sea and Baltic Aframax markets were fairly quiet in the past week. On the plus side, increased activity on fuel oil shipments were seen. However, this looked more like opportunity barrels rather than real business and fuel activity will not be enough to pick up the current slack.
In addition, Primorsk will be closed from the 5th- 9th of September due to maintenance.
Recent cargo activity in the Med and Black Sea have been exceptionally high, compared to what was experienced in the past few weeks. However, rates are still hovering around WS65-67.50.
Owners appear to agree to keep the quoted cargoes private as competition is fierce due to charterers having a large list of ships to choose from. Consequently, charterers can pick ships under the radar and seemingly manage to keep the rates at current levels.
Elsewhere, a report from Maritime Strategies International (MSI) suggests that current conditions in the VLCC market are not entirely attributed to seasonality, instead dynamics reflect lower rates of crude import growth across the year, combined with reduced waiting times and much higher deliveries.
The impact of much higher fleet growth this year is being amplified by the slowing demand environment. Importantly, the market has also ‘returned to normal’ with respect to congestion with little support from port delays, compared to earlier in the year.
MSI said that it expected the supply-side to be the dominant theme for the large crude sector well into 2017 and its forecast view for earnings remained under pressure.
“We are seeing a step change in delivery volumes this year, concentrated in the larger crude and products segments. Notably we have yet to see any increase in scrapping activity to counteract this, but we do expect this to pick up in 2H16 and 2017,” MSI senior analyst, Tim Smith, said, adding; “the market is now operating under ‘normal’ conditions with regard to congestion and bottlenecks, which were prevalent and constructive feature for freight rates earlier in 2016.”
Spot forecast for the Suezmax segment pales in comparison to the previous two years’ winter markets. MSI said. While some uplift is expected, gains will be muted.
Lower levels of supply-side pressure on the uncoated Aframax segment could alleviate weaker demand conditions, but MSI expected this segment’s freight market to continue to broadly track its larger peers, the report concluded
As for newbuildings, Japan Marine United (JMU) has won three VLCC orders, according to brokers’ reports.
Yokohama-based JX Ocean has ordered two VLCCs and Kyoei Tanker has contracted one. All are due for delivery in 2018. No price details were disclosed as they were probably concluded in Yen.
Elsewhere, two MRs, named ‘Dank Silver’ and ‘Madha Silver’, have joined Oman Shipping Company’s fleet (OSC).
The two tankers were built at Hyundai, Ulsan and are the seventh and eighth MRs in the ‘Silver Project’ series, which is an agreement between OSC and Shell to build 10 MRs.
The two tankers will come under the technical management of Oman Ship Management Company, one of OSC’s subsidiaries, which manages more than 75% of the current fleet.
Tsakos Energy Navigation (TEN) has announced the delivery of the 74,200 dwt LR1 ‘Sunray’ ,which will immediately enter a minimum 54 and maximum 78 month profit sharing contract to a significant oil major that could generate minimum gross revenues of about $40.5 mill.
‘Sunray’ is the fourth of a 15-vessel fully financed fleet growth plan to be delivered since June, 2016. With 13 of the 15-vessel programme having been built against long term accretive contracts, the minimum gross revenues expected by just these vessels could exceed $1.3 bill, if certain inbuilt options get exercised, TEN said.
Brokers also reported that an unnamed 2016-built TEN Aframax had been fixed to ExxonMobil for 12 months at $17,500 per day.
In addition, Refidomosa was thought to have taken the 2008-built ‘Koro Sea’ for three months at $22,000 per day, while ST Shipping was said to have fixed the VLCC ‘Nave Electron’ for a trip from the US Gulf to Singapore for $2.75 mill on a lumpsum basis.
In the S&P segment, Indonesian interests were believed to be behind the purchase of the 2003-built Aframax ‘CSK Valiant’ for $18 mill, while UAE-based Onex was reported as the buyer of the 1999-built Aframax ‘Great White’ for $13 mill.
Brokers also circulated the two 1998-built Aframaxes ‘Moscow’ and ‘Moscow Kremlin’ for sale. The price ideas were in the region of $14.2 mill each.
The 2002-built MR ‘Maple Express’ was thought committed to Chinese-based Hai Linh at $12 mill.
Reported leaving the fleet was the 1991-built MR ‘Akamas’ thought sold to Pakistan recyclers on a P&C basis.