Fearnleys Weekly - Tankers

Chartering - Crude

The vlcc market has remained slow with charterers drip feeding their cargoes into the market. Rate levels continued to weaken in most of the load areas. Tce ex Meg is rapidly approaching operational costs and hence owners resistance is building but the vessel supply remains ample going forward.... Owners with modern vessels in the east are turning to cargoes in the west with not too much relief to be found so far. A slight improvement in suezmax rates were achieved during last week, it was a long hard battle to get there for owners with the market topping out at w95 for TD20 for end 2nd decade dates. This upward trend was purely driven by bullish sentiment going against the grain of high availability on position lists. However the early part of this week saw charterers employing their starvation tactics with only a sprinkling of cargoes for owners to work. Patience has paid off and we are experiencing a slight slippage of levels as reality bites. Very little to report out of the Bsea region with Turkish Straits delays seemingly steady and sparse action off end month dates holding rates steady for TD6 at w95 levels for now. We expect the fixing activity to pick up over the coming week with the rest of this week remaining, into the next a Steady market outlook prevails. Aframaxes trading in the Nsea and Baltic have had a week with rates being fixed at bottom levels. Coming into next week we expect the market to firm on the back of a busier Baltic and Nsea program. In the Med and Bsea the cargo activity is still at decent levels. Some Owners are doing their best to push for a couple of extra points, but the list of available tonnage is still long and dates being worked are far forward. Some Owners might be lucky but we believe the market will remain steady for the rest of the week.

Chartering - Product

EAST OF SUEZ As we are fast approaching the holidays we are not yet seeing the market in the Middle East in any kind of elevated spirits. The market for LR2’s are unchanged at ws110 level for a voyage to the Far East whilst the LR1’s have been able to increase rate slightly to w135 level. For both sizes rates for a cargoes going to the Continent is almost unchanged at lumpsum USD 1,750 mill for the LR2’s and USD 1,350 for LR1’s. it has not been enough activity either for the MR’s to strengthen the market and they are still paid ws175 level for the voyage from west coast India to Japan. Not a very exciting week in the Far East either with the standard MR voyage from Singapore to Japan today at ws185 down from ws190 and the short haul voyage from south Korea to Japan is today at lumpsum USD 370’. WEST OF SUEZ A more positive tone in the Atlantic this week. The straight Continent to States voyage has improved some ws35 points to ws170 today and even with the drop in rates for the backhaul cargoes from the U.S. gulf to ws105 daily earnings for those able to triangulate is up to about USD 13.500 per day. LR’1s have also been popular this last week. With several vessels fixed for the Middle East Gulf discharge those left have seen the rate for West Africa discharge improve about ws30 point to ws130 level. The biggest gain this week has been for LR2’s loading from the Mediterranean to the Far East where rates have risen from USD 1,725 mill to close to USD 2,0 mill today. Handies in the Mediterranean have had an uneventful week and vessels are still trading around the ws185 mark. Their sisters on the Continent have been very active and rate have shot up ws40 points to ws180 this week.

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 25.00 26.00 20.00 60.00
MEG / Japan VLCC 53.00 57.50 39.00 96.50
MEG / Singapore VLCC 53.00 58.50 40.00 96.00
WAF / FEAST 260,000 60.00 64.00 46.00 97.50
WAF / USAC 130,000 90.00 80.00 52.50 117.50
Sidi Kerir / W Me 135,000 87.00 77.50 62.50 117.50
N. Afr / Euromed 80,000 90.00 75.00 70.00 190.00
UK / Cont 80,000 92.50 87.50 85.00 125.00
Caribs / USG 70,000 170.00 160.00 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 110.00 110.00 80.00 155.00
MEG / Japan 55,000 135.00 127.50 100.00 150.00
MEG / Japan 30,000 175.00 177.50 120.00 180.00
Singapore / Japan 30,000 185.00 190.00 130.00 215.00
Baltic T/A 60,000 130.00 105.00 85.00 155.00
UKC-Med / States 37,000 170.00 135.00 97.50 210.00
USG / UKC-Med 38,000 105.00 125.00 70.00 150.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 27,500.00 27,500.00 26,500.00 30,000.00
Suezmax (modern) 17,500.00 17,500.00 17,000.00 22,800.00
Aframax (modern) 15,000.00 15,000.00 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 13,750.00 13,500.00 12,500.00 13,750.00
VLCCs fixed all areas last week: 45 previous week: 51
VLCCs avail. in MEG next 30 days: 133 last week: 145

Sales and purchases

Vessel Size Built Buyer Price Comm.
Flandre 305 688 2004 MODEC 45 Long subs, FPSO project
High Presence 48 700 2005 Undisclosed 14,10 Incl 6yrs TC
EK-Sky 13 786 1999 Undisclosed 7,00