This first halted to the recent declining market and then during the last few days, a firmer trend in owners favour, Fearnleys reported.
About 100 VLCCs were recorded fixed ex MEG, but with about 60 available vessels this month, depending on ballast speed, there should be sufficient tonnage available.
In the Atlantic, tonnage coming open in the North Sea and US Gulf has been fixed, leaving WAfrican cargoes to ballasters from the East taking away some of the MEG surplus.
For Suezmaxes, the past week could be described as lacklustre. The only area with fairly consistent activity was the Black Sea with the 2nd decade stems picking off candidates at last done levels.
Meanwhile, West Africa saw a smattering of cargoes in the mid-month window, a sparse volume for the owners to cope with, Fearnleys said.
This week commenced with a hollow tone, as charterers sat back on 3rd decade stems in WAfrica taking the wind out of the owners sails and it was only on Wednesday that we saw some action, as WS80 was fixed for UK/Cont/Med jolting the market downwards.
The short-term outlook is fairly bleak for owners with a light third decade courtesy of the VLCCs. The question is where will it bottom out? Could we see Suezmaxes adopting the slow steaming tactic to conserve bunkers following their larger cousins?
North Sea and Baltic Aframaxes softened further this week, as the cross-North Sea and Baltic Fuel oil market activity has been almost non-existent recently.
At the time of writing (Wednesday) charterers are meeting some resistance trying to repeat last done levels, and rates should strengthen marginally going forward.
In the Med and Black Sea this week, rates softened to WS115. After last week’s mini-rush, we are now facing a market with about 25 prompt ships. Even fog in the Bosporus, and maintenance in Trieste, combined with heavy delays in Fos, will not be enough to help owners at the moment.
As such, the rates will continue to be under pressure, Fearnleys predicted.
According to a report from Ocean Freight Exchange (OFE), in an interesting turn of events, the West African VLCC market rebounded late last week from its lowest point in six months.
Belying its usual trend of aligning with the MEG market, VLCC rates on the WAF/East route firmed by WS1.5 points to WS55 on Thursday last week, due to increased activity in WAF, as well as owners’ increasing refusal to lock in long-haul voyages at low returns. The lack of disadvantaged units in WAF also allowed owners to grab a premium for modern tonnage.
The total number of ex-WAF VLCC fixtures last week grew by 62.5% week-on-week to 13, marking a four-week high. This reflected a surge in third-decade April loading cargoes, which helped to tighten tonnage in the region.
However, overall WAF April loading crude exports to Asia fell by 2.1% month-on-month to 2.07 mill barrels per day according to Reuters data. OFE’s data indicated that around 35 ex-WAF VLCC stems were fixed for April loading, down by 12.5% month-on-month.
Demand from Asian buyers (notably China) was muted compared to the last two months, due to heavy refinery maintenance in Asia, which peaks this month. At least 2.5 mill barrels per day of refining capacity is likely to be shut in April, up by 1.2 mill barrels per day year-on-year.
Elsewhere, Norden has confirmed the long-term charters of two new MRs scheduled for delivery in 2018.
The new additions will be a supplement to four MRs, which the company ordered, and which are due for delivery during the coming 18 months, chairman Klaus Nyborg, said.
The company has the option to extend the charter period for all six ships and purchase options were also agreed.
Brokers reported that the 2016-built Suezmax ‘Goldway’ was fixed to Phillips66 for six months at $21,500 per day, while Mercuria took the 2016-built Suezmax ‘RS Tara’ for 12 months at $20,500 per day.
AET reportedly took the 2008-built Aframaxes ‘Yasa Golden Dardanelles’ and ‘Yasa Golden Marmara’ for two years at $15,500 per day per vessel, plus an option for a further year at $18,000 per day. Navig8 was thought to have fixed the 2010-built Aframax ‘Leyla K’ for six option six montha at $15,000 and $15,500, respectively.
The 2004-built LR1 ‘Freight Margie’ was believed taken by Trafigura for 12 months at $13,650 per day, plus a six month option at $14,500 per day.
Several MRs were reported fixed at rates varying from $12,000-£13,750 per day, depending on the period agreed and a Handysize was fixed for 12 months at $13,500 per day.
In the S&P sector, the 2000-built ‘Front Scilla’ was said to have been sold to undisclosed interests for $21.5 mill. The 2002-built Aframaxes ‘Gener8 Daphne’ and ‘Gener8 Elektra were thought to be on subjects to Far East interests for $10.5 mill each.
Elsewhere, the 2004-built MR ‘Mare Caribbean’ was reported sold to Union Maritime for $11.4 mill and the 2000-built Handysize ‘Torm Trinity’ was thought sold to Waruna for $7.9 mill.
Leaving the fleet was the 1992- built parcel tanker ‘Stolt Hill’ sold to Indian breakers.
In the newbuilding sector, brokers said that ncreased enquiry and ordering activity had been seen in both the tanker and drybulk segments.
Owners seemed to be eager to secure the last Tier II slots available at shipyards, helped by historically low newbuilding prices and increasing ship grade steel prices.
For example, Maran Tankers returned to DSME to order three VLCCs for $83 mill apiece. They are to be delivered during 2018.
In addition, Formosa Plastics reportedly ordered three MRs and CSSC for $33 mill each.