Fearnleys Weekly - Tankers

Chartering - Crude

We are near mid-winter with earlier expectations of a ‘winter-market’ for the VLCC’s. The volumes have simply not been sufficient for the respective main routes and tonnage has built up over time. The charterers have and will play their hands carefully and pressure on the rates remain in full force. Earnings are however just about $8k/day for Meg/East and about $10k/day for Wafr/East and not expected to change in the near term. A large increase in volumes for all major routes over time is needed to change the present sentiment. The Suezmax market continued to see limited activity last week, Wafr again remained particularly quiet with plenty of available tonnage for the few cargoes that materialized. Med/Bsea at least saw more cargoes that needed coverage but with a overhang of tonnage that has been building up rates unavoidably declined in this area also. On a positive note in a suffering market. The Usg/Caribs experienced increased volumes and steady fixing, at least a small positive factor for owners ending up in the area as their vessels more easily found employment. Nsea and Baltic Aframax rates came down marginally from last week due to a 5 day maintenance in Ust Luga. Early February could look a tad more interesting as new ice is expected in the Gulf of Finland. That being said, the 2016 dreadful ice season looks good compared to this year’s one at the time of writing. In the Med and Bsea, we saw a small increase in the rate towards the end of last week. Owners were doing their best to hold back, and let the list of cargoes build up. For once, no one caved and they managed to push rates above w100. This didn’t last for long as entering this week an increasing tonnage list and basically zero activity pushed rates right back down again.

Chartering - Product

EAST OF SUEZ Owners have little to cheer about in the Middle East Gulf. Once again it has been a quiet week with rates sliding and earnings are now at very low levels. LR2’s and LR1’s trading to Japan/South Korea range are today only earning about USD 5.000 per day. Rates for westward cargoes are also mostly unchanged at USD 1,4 mill for LR2’s and USD 1,1 mill for the LR1’s. Even the same muted market for MR’s which have seen the rate from west coast India to Japan drop further and is today at ws125 level, which means about USD 5.000 per day. In the Far East it also does not seem there will be any recovery soon and rates are still softening. The short haul voyage from south Korea to Japan has declined further and is today at USD 250’. The MR voyage from Singapore to Japan is down ws10 points to ws135 today. WEST OF SUEZ A slightly different story in the western hemisphere where rates are at higher levels and where we see a more stable market. Mrs trading to the States have seen rates move marginally by ws5 this week but the back haul cargo from the U.S. gulf has gained ws15 points last week giving owners triangulating daily earnings in the region of USD 19.000 per day, up from USD 16.000 per day last week. Activity for LR1’s have continued this week both for East destinations and west Africa discharge and the rate for west Africa has improved ws10 points thus giving earnings in the region of USD 18.000 per day. Activity for LR2’s loading in the Mediterranean is maintained and rates are unchanged at USD 2,15 mill for Far East discharge. After the party last week for the Handies rates have again dropped and for owners trading on the Continent rates have dropped ws30 Points to ws160 level while the sisters in the Mediterranean are today getting ws195 for their services, down from ws205

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2018 High 2018
MEG / West VLCC 21.00 21.00 21.00 21.00
MEG / Japan VLCC 41.00 42.50 41.00 42.50
MEG / Singapore VLCC 42.00 43.50 42.00 43.50
WAF / FEAST 260,000 43.75 44.00 43.75 44.00
WAF / USAC 130,000 55.00 62.50 55.00 62.50
Sidi Kerir / W Me 135,000 60.00 67.50 60.00 67.50
N. Afr / Euromed 80,000 97.50 82.50 82.50 97.50
UK / Cont 80,000 95.00 92.50 92.50 95.00
Caribs / USG 70,000 132.50 107.50 107.50 132.50
CLEAN (Spot WS)
MEG / Japan 75,000 80.00 85.00 80.00 85.00
MEG / Japan 55,000 92.50 100.00 92.50 100.00
MEG / Japan 30,000 127.50 132.50 127.50 132.50
Singapore / Japan 30,000 135.00 145.00 135.00 145.00
Baltic T/A 60,000 145.00 135.00 135.00 145.00
UKC-Med / States 37,000 155.00 150.00 150.00 155.00
USG / UKC-Med 38,000 130.00 115.00 115.00 130.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 27,500.00 27,500.00 27,500.00 27,500.00
Suezmax (modern) 16,750.00 17,000.00 16,750.00 17,000.00
Aframax (modern) 14,750.00 15,000.00 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 14,000.00 14,000.00 14,000.00 14,000.00
VLCCs fixed all areas last week: 57 previous week: 40
VLCCs avail. in MEG next 30 days: 119 last week: 127

Sales and purchases

Vessel Size Built Buyer Price Comm.
Gener8 Miltiades 301 038 2016 US Based (international Seaways) 434 Price for multiple Gener8 VSL following below
Gener8 Andriotis 301 014 2016 US Based (international Seaways) *
Gener8 Chiotis 300 932 2016 US Based (international Seaways) *
Gener8 Stregth 300 960 2015 US Based (international Seaways) *
Gener8 Success 300 932 2016 US Based (international Seaways) *
Gener8 Supreme 300 932 2016 US Based (international Seaways) *
High Freedom 49 990 2014 Japanese 28,00 Sale Leaseback, 10-yr BB With p.o
Team Houston 13 221 2008 Thai (Ama Marine) 8.7