Volumes from MEG were lagging, compared to previous months, with a corresponding tonnage build up resulting in sliding rates.
In contrast, activity surged from the Americas, and rates inched upward, Fearnleys said in its weekly report.
However, the export barrels have by and large been committed on ships open in the western hemisphere, and thus has not significantly eased the pressure from MEG.
Suezmax rates gradually softened recently, but have become more stable in the past week. Fearnleys noted a considerable increase in cargo activity in all areas, especially in the Black Sea where charterers have had to fix on very forward dates in order to accommodate a rare Canakkale cancelling of 25 days.
Meanwhile, the conversion from 2018 to 2019 flat rates was seemingly underway with several fixtures reported concluded under the new scale with very little resistance from owners.
The Black Sea situation is potentially a spark for other areas to firm, with charterers in the Med also having to secure early tonnage. This will need close monitoring in the week ahead.
Aframax rates in North Sea/Baltic came off this week, as too much tonnage was available, compared to quoted cargoes. Rate wise, we are currently at bottom levels as surrounding markets in the Med and Caribs are offering viable alternatives to the prompt North Sea positions.
Moving into 3rd decade of January, we see a tighter position list as more vessels are sailing out of the area. We expect as such firmer market at the end of this month, as a fairly active week was seen in the Med and Black Sea.
Charterers looking to secure prompt tonnage for straight cross-Med cargoes have still been able to achieve last done levels, while there has been a slight upward correction in the eastern Med and Black.Sea.
In addition, poor weather conditions in the eastern Med has caused further delays in the Turkish straits.
A few owners decided to move some of their non-ice class tonnage on spec from the north towards the Med and Black Sea in hope of slightly better earnings, Fearnelys concluded.
Elsewhere, TEN has announced that two product carriers had been chartered out for 36 months each to a major oil concern.
At a minimum, these two fixtures combined are expected to generate $33 mill of gross revenues.
“With 2018 finishing on an upbeat note for all tanker segments, these two fixtures further signify a strong market for this year which the company’s employment strategy is designed to take advantage of,” George Saroglou, TEN COO explained. “We expect the market in 2019 to maintain the strong momentum as a result of the current supply and demand equilibrium, as well as the anticipated disruptions due to the upcoming IMO 2020emission regulations.
“TEN is positioning itself appropriately to benefit from this unfolding positive freight environment,” he concluded.
One fixture reported by brokers was that of the 2005-built MR ‘UACC Concensus’ to BP for three to four months at $14,500 per day.
In the S&P sector, d’Amico Tankers has signed a memorandum of agreement and bareboat charter contract for a newbuilding LR1.
Under the agreement, the company will sell and leaseback the 75,000 dwt ‘Cielo di Houston’, currently under construction at Hyundai Mipo Dockyard.
The vessel, which is expected to join the fleet this month, was sold for $38.6 mill, allowing d’Amico Tankers to generate around $10.2 mill in cash from the transaction, the company said.
d’Amico Tankers will maintain full control of the tanker, as a 10.2-year bareboat charter agreement was concluded with the buyer.
In addition, the company has the option to repurchase the vessel, after five years and seven years of the charter period, at “a competitive cost of funds.”
“I am glad to announce the conclusion of this transaction with a large Japanese financial institution, which will generate net cash proceeds of approximately $10.2 mill for DIS, relative to financing the vessel through the previously committed bank loan,” Paolo d’Amico, DIS Chairman, said.
“This is our first JOLCO (Japanese Operating Lease with Call Option) transaction; it is a pioneering deal for a non-Japanese shipowner, providing us with a new source of capital with enhanced economics relative to conventional Japanese sale-leasebacks,” he said.
In another sale and leaseback deal, Watson Farley & Williams (WFW) has confirmed that it had advised CCB Financial Leasing (CCBL) on a $132.8 mill sale and leaseback transaction of two VLCCs.
They were acquired from and chartered back to two subsidiaries of Globe Shipholding, a group of companies maintaining a fleet of crude carrier tankers managed by Almi Tankers.
CCBL’s transaction with Globe represents the first completed sale and leaseback of VLCCs in the Chinese leasing community, WFW said. Some $132.8 mill was drawn by Globe under the sale and eight-year capital lease back transaction, which was put to various uses including the refinancing of certain bank loans secured on the two tankers.
Founded in 2007, Beijing-based CCBL provides financial leasing solutions to large, medium, and small businesses across China. It is a subsidiary of China Construction Bank Corp.
Elsewhere, brokers reported the sale of the 2007 MR ‘Foromosa Sixteen’ to Greek interests for $8 mill.