Fearnleys Weekly - Tankers

Chartering - Crude

Extensive holidays in the east but it was hardly noticed as VLCC activity was high to say the least. Continued demand for all the major routes has propelled the already firm momentum further. Charterers reaching out on dates to have more choices of ships and owners optimism rising together with rates. Earnings Meg and Wafr/East upto abt $20k/d with owners aiming to push rates further into the winter. The Suezmax market in Wafr over the past week has softened with third decade dates shown sparsely causing rates to erode gradually and settling at the w72.5 level. Meanwhile the main focus has been on the Blsea and Med where a shortage of vessels on the Aframaxes in the 3rd decade has spilled over onto the s-maxes who have been soaking up the part cargoes at premium rates, TD6 is currently w87.5. This in turn has thinned the list for s-max stems creating a firmer trend. Naturally this has ignited owners bullish sentiment and with early Nov Wafr dates due to show imminently, the owners know there is potential momentum with cargo volume set to increase and they will look to capitalise accordingly. The aframax market in the Nsea and Baltic experienced an uptick in rates on the back of more ships leaving the area and as such not re-appearing in a natural fixing position for the current fixing window. A busier program for the 3rd decade coupled with bad weather in the Nsea is filling owners with more confidence. Moving forward towards end month we expect rates to climb further. The winner of last week’s Mexican standoff was everyone with tonnage in the Med and Bsea. The heavy 3rd decade programme out of Bsea combined with less tonnage and determined owners drove rates up ten points at the time. As a consequence the above mentioned s-maxes came into play. We are currently at W150 ex Bsea and waiting to see the outcome of Petrogal’s long xMed cargo with both s-maxes and a-maxes in at numbers from w160 and upwards. Going forward we expect more activity ex Libya and the last couple of cargoes out of Bsea for 3rd decade, so this market will not soften anytime soon.

Chartering - Product

EAST OF SUEZ After last week’s various public holidays in the Far East the market this week has been slow and rates have been on a downward trend all week. In the Middle East Gulf the LR2’s, for voyage going East, rates have slipped from ws142,5 to ws130 and the rates for LR1’s have dropped to ws125 level from ws140 last week. A little bit different story for rates to the Continent where rates for LR2’s are almost USD 100.000 higher than last week at USD 1,950 mill today whilst the LR1’s have been pushed to accept rates USD 200.000 less than last week and is today at USD 1,5 mill. MR’s fixing from west coast India to Japan have also been put under pressure and rates have slided ws10 points to ws160 level today. No different in the Far East where the benchmark voyage from Singapore to Japan is down ws25 point to ws175, And the short haul voyage from south Korea to Japan is down from USD 335’ to USD 305’ today WEST OF SUEZ The market in the Atlantic has been fairly quiet and uneventful this week. Rates are still at low levels but it seems a floor has more or less been established. The standard MR voyage from the Continent to States is still at ws120 But unfortunately the back haul cargo from U.S. gulf is down about ws5 points to 72,5 level. Daily earnings for the triangulation is today at USD 6.000 per day, compare to USD 6.500 per day last week. The LR1’s in the Atlantic is fixing around the ws100 mark. The rate for LR2’s loading in the Mediterranean is more or less unchanged from last week at around USD 1,725 mill mark. Handies trading in the Mediterranean and on the Continent have only seen a slight decline in rates and is today at ws137,5 on the Continent and ws180 in the Mediterranean, both segment down about ws5 points last week.

Activity level

VLCC Suezmax Aframax P.E. of Suez P.W. of Suez
Stable Stable Firm - -

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 25.00 26.50 20.00 60.00
MEG / Japan VLCC 63.50 60.00 39.00 96.50
MEG / Singapore VLCC 64.50 62.00 40.00 96.00
WAF / FEAST 260,000 64.00 62.00 46.00 97.50
WAF / USAC 130,000 70.00 75.00 52.50 117.50
Sidi Kerir / W Me 135,000 80.00 75.00 62.50 117.50
N. Afr / Euromed 80,000 150.00 102.50 70.00 190.00
UK / Cont 80,000 120.00 97.50 85.00 120.00
Caribs / USG 70,000 150.00 95.00 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 130.00 142.50 80.00 155.00
MEG / Japan 55,000 127.50 140.00 100.00 150.00
MEG / Japan 30,000 162.50 172.50 120.00 175.00
Singapore / Japan 30,000 177.50 200.00 130.00 215.00
Baltic T/A 60,000 97.50 100.00 85.00 155.00
UKC-Med / States 37,000 120.00 120.00 105.00 210.00
USG / UKC-Med 38,000 70.00 77.50 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) 17,000.00 17,000.00 17,000.00 22,800.00
Aframax (modern) 14,250.00 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 13,500.00 13,500.00 12,500.00 13,750.00
VLCCs fixed all areas last week: 49 previous week: 62
VLCCs avail. in MEG next 30 days: 108 last week: 119

Sales and purchases

Vessel Size Built Buyer Price Comm.
BLS Advance 84 999 2002 Avin 7,80
Maersk Ellen 36 962 2002 Nigerian 9,50
Rita 13 843 1996 Taihua Ship Management 5,20
Oriental Wisteria 12 499 2001 Sunwoo Tanker 7,80
Zeynep A 11 276 2007 Undisclosed 8,00