Fearnleys Weekly - Tankers

Chartering - Crude

A quiet week in the VLCC market. With most of the Far Eastern charterers on holidays celebrating the Lunar New Year, along with IP week in London made fresh enquiries hard to come by. The little that has been fixed has not made any noteworthy impact on the current market as the TCE earnings continue to be below opex levels. More activity is needed in order to make the tides turn in owners favour as the tonnage list continue to stay ample in all load areas. For Suezmaxes the 1st decade of March there has been a significant improvement in the volume of cargoes working in Wafr, this has contributed to a more steady market as a level of fluidity has returned. Furthermore the VLCC fixing action in Wafr for the 2nd decade has been light therefore allowing further cargo potential for the Smaxes in the week ahead. The Bsea has been ticking over with TD6 currently around the ws67.5 mark and earnings hovering just about in positive territory. The forward paper for TD20 is still trading ever so slightly up on current levels but tonnage oversupply is still cancelling out any potential for major market upswing, more of the same for the foreseeable future unfortunately. Rates remained unchanged for Aframaxes trading in the Nsea and Baltic, despite ice developing rapidly in the Gulf of Finland. This is caused by the polar vortex that has split in two, that tends to be associated with some of the coldest air during the winter season. This should not have any impact on the rates for the time being but though, could lead to delays going forward. In the Med and Bsea we might as well copy and paste last week’s roundup of the market. Except for the fact that we have moved from Libya end month cargoes to ely decades Bsea lifting, the rates are much the same as last week. Owners are still trying to hold for a couple of more points every time a replacement job comes along, unfortunate it usually doesn’t do more than give one lucky owner a 2.5 to 5 ws-points increase on one fixture. We believe the rest of the week will remain the same, but will continue to hope for better times.

Chartering - Product

EAST OF SUEZ With the Chinese New Year celebrations, IP week in London and Presidents day in the States, activity has been muted and there has been no chance for owners to put pressure on rates. LR2s have not been able to withstand the downward trend seen last couple of weeks and rates have dropped further ws10 points this week to ws82.5 today, but LR1s have actually been able to maintain and even add a couple of points this week and rate paid is around the ws107.5 mark for Far East discharge. Rates for going westwards are slightly higher for LR1s at USD 1.250 mill, whilst LR2s are still at around USD 1.3 mill mark. No change for the standard MR voyage from West Coast India to Japan, which is still at ws127.5. In the Far East, it has been no changes since last week with the short-haul voyage from South Korea to Japan still at USD 280,000 and the straight voyage from Singapore to Japan at ws132.5. WEST OF SUEZ Last week the market in the western hemisphere were able to increase rates, but with IP week and Presidents day in the States this week it has been a slow week for owners. The straight Continent to States voyage for an MR has dropped from ws165 to ws135 level today, but the back-haul cargo from US Gulf has gained ws5 points to ws100 today. Unfortunately, the small gain for the back-haul cargoes has not been enough; daily earnings dropped from about USD 17,000 to USD 13,000 today for owners triangulating. LR1s trading to West Africa is unchanged at ws105 level. It seems the sliding rates for the LR2s loading in the Mediterranean for Far East has stopped, and rate is unchanged at USD 1.550 mill. Handies are still trading more or less at same levels as last week in the Mediterranean and on the Continent with ws220 paid on the Continent and ws160 in the Mediterranean.

Activity level

VLCC Suezmax Aframax P.E. of Suez P.W. of Suez
Stable Stable Mixed Slow Slow

Rates

DIRTY (Spot WS) This week Last week Low 2018 High 2018
MEG / West VLCC 18.00 19.00 18.00 23.50
MEG / Japan VLCC 37.50 38.00 37.50 50.00
MEG / Singapore VLCC 38.50 38.50 38.50 51.00
WAF / FEAST 260,000 41.50 42.50 41.50 48.50
WAF / USAC 130,000 50.00 52.50 50.00 62.50
Sidi Kerir / W Me 135,000 55.00 57.50 55.00 67.50
N. Afr / Euromed 80,000 87.50 90.00 82.50 110.00
UK / Cont 80,000 90.00 90.00 90.00 107.50
Caribs / USG 70,000 102.50 80.00 80.00 132.50
CLEAN (Spot WS)
MEG / Japan 75,000 82.50 92.50 80.00 92.50
MEG / Japan 55,000 107.50 105.00 90.00 107.50
MEG / Japan 30,000 127.50 130.00 110.00 132.50
Singapore / Japan 30,000 132.50 132.50 130.00 145.00
Baltic T/A 60,000 105.00 105.00 100.00 145.00
UKC-Med / States 37,000 135.00 165.00 135.00 165.00
USG / UKC-Med 38,000 100.00 105.00 80.00 135.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 25,000.00 26,000.00 25,000.00 27,500.00
Suezmax (modern) 16,750.00 16,750.00 16,750.00 17,000.00
Aframax (modern) 14,750.00 14,750.00 14,750.00 15,000.00
LR2 105,000 15,000.00 15,000.00 15,000.00 15,000.00
LR1 80,000 13,750.00 13,750.00 13,750.00 13,750.00
MR 47,000 13,750.00 13,750.00 13,750.00 14,000.00
VLCCs fixed all areas last week: 40 previous week: 39
VLCCs avail. in MEG next 30 days: 134 last week: 129

Sales and purchases

Vessel Size Built Buyer Price Comm.
Huyundai ulsan 3014 318953 2019 Ocean Yield 83,75 Incl. 15yrs BBB and Sellers credit
Huyundai ulsan 3013 318953 2019 83,75
Huyundai ulsan 3015 318953 2019 83,75
Huyundai ulsan 3012 318953 2019 83,75
Front Circassia 306009 1999 Foresight 18,5
HS Carmen 113 033 2003 Greek 11,30
Rosa Tomasos 37 000 2003 Far Eastern 8,75