Fearnleys Weekly - Tankers

Chartering - Crude

The demand dwindled over the past week for VLCC tonnage ex MEG as charterers remained in control backed by a more than ample list of available tonnage. It seems no help to the beleaguered market that owners are ballasting from Far East to the Atlantic on spec. Under pressure on all fronts. The Suezmax market experienced a quieter period after a frenzy of fixing recently. Charterers have been taking a more measured approach resorting to drip feeding the market keeping rates in check. TD20 has peaked at ws 75 giving owners still meagre returns of close to to usd 10k per day whilst TD6 has found its level at ws 85 for end month dates. Interestingly even after the hurricane devastation in the region the usg and caribs market has seen fairly significant volume with demand up in the east. Overall predictions are for a steady week ahead with early October dates upon us, the fourth quarter beckons. As expected, rates for Aframaxes trading in the Nsea and Baltic have increased further this week. A busy 3rd decade loading program coupled with a more balanced list in Owners favour pushed rates upwards. As the US crude (WTI) is quite cheap compared with Nsea crude (Brent) we could see more vessels coming in to the area from the US as the arb seems wide open. However, the current firm trend will continue as bad weather in the North Sea could cause some vessels delaying and as such add to the upward pressure we currently experience. In the Med and Bsea we can announce that the Owners are once again earning some well-deserved $. Libya volumes did not let us down after all, and a lot of changes and confusion in the Bsea program made it the perfect habitat for hungry Owners. We are at the time of writing ticking off rates up to mid w120 and demurrages almost touching 30k pd. More good news, there are still cargoes to be fixed and few ships to play with. To all the Owners out there, please enjoy this for all it is worth.

Chartering - Product

EAST OF SUEZ Finally owners have been able to push back and put some pressure on charterers. Both sizes, LR1’s and LR2’s, have gained about ws10 points this last week for fixtures to Far East. Rates paid today is ws112,5 for LR2’s and ws132,5 for LR1’s and there could be room for more improvements. Unfortunately rates for Continent discharge has not yet followed suit and is still around USD 1,6 mill for LR2’s and USD 1,4 for LR1’s. MR’s fixing from west coast India to Japan/south Korea range have also had a good week with rates improving ws20 points to ws165 level. Also in the Far East the market has improved this last week with the standard voyage from Singapore to Japan moving from ws160 to ws190 and the short haul cargo from south Korea to Japan has increased from usd 280’ to USD 335’ WEST OF SUEZ The activity in the Atlantic have slumped this week and rates have declined, maybe harder than everyone thought they would after the uptick due to tropical storms in the U.S. The straight Continent to States voyage is today paying about ws110 level, down from ws150 a week and down from ws250 2 weeks ago. The backhaul rate from U.S. gulf to Continent has also slipped and is today at ws85 level. Daily earnings today for a triangulation voyage is today about USD 7.000 per day down from USD 23.000 ten days ago. Also the LR1’s have due to less activity for supplying product to the states seen the rate drop from ws120 to about ws105 level. LR2 stems from the Mediterranean have also slipped from USD 1,580 mill to USD 1,525 mill level. Handies trading in the Mediterranean have traded at more or less same levels as last week around the ws135 mark, whilst handies on the Continent Have seen activity and rates drop from ws175 to ws130 level today.

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 20.00 22.00 20.00 60.00
MEG / Japan VLCC 41.00 41.00 39.00 96.50
MEG / Singapore VLCC 40.00 42.50 40.00 96.00
WAF / FEAST 260,000 47.00 50.00 46.00 97.50
WAF / USAC 130,000 72.50 67.50 52.50 117.50
Sidi Kerir / W Me 135,000 77.50 77.50 62.50 117.50
N. Afr / Euromed 80,000 125.00 100.00 70.00 190.00
UK / Cont 80,000 107.50 95.00 85.00 117.50
Caribs / USG 70,000 140.00 165.00 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 112.50 100.00 80.00 155.00
MEG / Japan 55,000 132.50 125.00 100.00 150.00
MEG / Japan 30,000 165.00 146.00 120.00 167.50
Singapore / Japan 30,000 190.00 160.00 130.00 190.00
Baltic T/A 60,000 105.00 120.00 85.00 155.00
UKC-Med / States 37,000 110.00 150.00 105.00 210.00
USG / UKC-Med 38,000 87.50 105.00 72.00 150.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 26,500.00 27,500.00 26,500.00 30,000.00
Suezmax (modern) 17,000.00 17,000.00 17,000.00 22,800.00
Aframax (modern) 14,000.00 14,000.00 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 13,250.00 13,250.00 12,500.00 13,750.00
VLCCs fixed all areas last week: 49 previous week: 62
VLCCs avail. in MEG next 30 days: 124 last week: 125

Sales and purchases

Vessel Size Built Buyer Price Comm.
Tara 160 036 2016 Cardiff 51,00
Neptune Voyager 104 875 2003 Spring Marine 10,20
Stellar Voyager 104 801 2003 Spring Marine 20,20
King Emerald 38 875 2004 Undisclosed 7,20