Fearnleys Weekly - Tankers

Chartering - Crude

The VLCC Meg program for November was concluded last week with some 132 done, volumes not seen since January. We are between the months and as usual activity a bit subdued. A couple of December deals done, but basically Bot cargoes and rates basically as per last done levels. Saudi stem-confirmations possibly out end week. Wafr/East activity also a bit slower, but owners remain resilient and rates remain stable as optimism in general still in place for the winter. The Suezmaxes have experienced rates steadily eroding over the past week, with Wafr slipping from the low w80’s down to w72.5 for TD20, the end November cargoes were thin on the ground and other areas remained quiet allowing tonnage to build. Owners earnings have been further eaten into by increasingly expensive bunkers adding to the pain the earning levels are now below the $10 k per day threshold . So far the Turkish straits delays have been unseasonably minimal, although this is expected to change in the weeks ahead in the winter months. There is a glimmer of hope in the Med and Bsea where there has been a sudden flurry of action on the Aframaxes and lists have tightened. This was the trigger a year ago for Suezmaxes and owners will be watching with keen interest for any opportunity to capitalize. The week ahead currently has a softer feel but this could turn around on increased volume or weather delays. Norwegian meteorologists are guessing we will have a warm start to this winter season, and North Sea and Baltic aframax markets should be moving sideways heading towards December. The fact that there is a 5 day maintenance coming up in Primorsk undermines the “bold” statement above. The Med and Bsea softened last week, and has stayed rather flat ever since . However it is once again looking to firm up next week, as tonnage is quickly being picked up for early 1st decade, leaving the cross-med cargoes with fewer options going forward.

Chartering - Product

EAST OF SUEZ Whilst the festivities have been ongoing in Dubai this week it has been little momentum for the owners to push rates upwards. In the Middle East Gulf, all segments are more or less unchanged from last week with the LR2s and LR1s fixing for Japan discharge both obtaining about ws122.5/125 mark. Rates for going to the Continent also more or less same at USD 1.8 mill for LR2 and USD 1.3 mill for LR1s. The standard MR voyage loading from west coast India to Japan is still at ws175 level. A little bit more mixed in the Far East where an MR voyage from Singapore to Japan is still being covered at ws177.5 level, whilst the short haul voyage from South Korea to Japan has increased from USD 345’ to USD 380’ today. WEST OF SUEZ By contrast, the market in the Atlantic has been active this week and the MR segment has been on fire. The rate for a straight Continent to the States has improved from ws105 to ws140 today and on the back of that the back-haul cargo from US Gulf to the Continent have also improved from ws105 to ws135 level today. This means that owners triangulating in the Atlantic are obtaining a daily return of about USD 14,000 compared to USD 8000 per day last week. Rates for LR1s are flat around the ws105 mark for a voyage to West Africa, and LR2s loading in the Mediterranean for Japan range are still being paid around the USD 1.750 mill mark. No change in rate levels for the handies trading in the Mediterranean and on the Continent. Rates are still in the region of ws125/130 level.

Activity level

VLCC Suezmax Aframax P.E. of Suez P.W. of Suez
Stable Soft Mixed Stable Firming

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 27.00 28.00 20.00 60.00
MEG / Japan VLCC 69.00 70.00 39.00 96.50
MEG / Singapore VLCC 79.00 72.00 40.00 96.00
WAF / FEAST 260,000 70.00 71.00 46.00 97.50
WAF / USAC 130,000 72.50 80.00 52.50 117.50
Sidi Kerir / W Me 135,000 75.00 87.50 62.50 117.50
N. Afr / Euromed 80,000 100.00 102.50 70.00 190.00
UK / Cont 80,000 87.50 85.00 85.00 125.00
Caribs / USG 70,000 100.00 100.00 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 122.50 125.00 80.00 155.00
MEG / Japan 55,000 125.00 125.00 100.00 150.00
MEG / Japan 30,000 175.00 172.50 120.00 175.00
Singapore / Japan 30,000 177.50 177.50 130.00 215.00
Baltic T/A 60,000 105.00 110.00 85.00 155.00
UKC-Med / States 37,000 140.00 105.00 97.50 210.00
USG / UKC-Med 38,000 135.00 115.00 70.00 150.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 28,000.00 28,000.00 26,500.00 30,000.00
Suezmax (modern) 17,500.00 17,750.00 17,000.00 22,800.00
Aframax (modern) 15,500.00 15,500.00 14,000.00 18,500.00
LR2 105,000 15,000.00 15,000.00 15,000.00 16,750.00
LR1 80,000 13,750.00 13,750.00 13,750.00 14,000.00
MR 47,000 13,500.00 13,500.00 12,500.00 13,750.00
VLCCs fixed all areas last week: 57 previous week: 50
VLCCs avail. in MEG next 30 days: 105 last week: 124

Sales and purchases

Vessel Size Built Buyer Price Comm.
Cap Georges 148 000 1998 Indian 9,80