Fearnleys Weekly - Tankers

Chartering - Crude

It is hard to see much change from last week in the market for the vlcc’s, and for all the major routes. Volumes remain healthy, but the over-supply of tonnage keeps a lid on all hopes for any turnarounds. Earnings remain well below $10k/day, except for those with modern eco types which achieves in the very low $-teens/day. Tough times and few changes on the horizon in the near term. The high activity in the suezmax market continued through the last week but as of Friday it suddenly died off as end month Wafr dates were fixed away. The first decade of April has seen high activity on the vlcc’s with 12 deals booked and the majority of the bbls going east, combined with a short Wafr programme the suezmaxes face a quieter period ahead. Several key owners have taken a bearish view in the early part of this week chasing down cargoes and having a clear out of their tonnage. This has sent a message to the rest of the market and a softer tone has developed, with confidence waning and with TD20 dropping to w62.5 and earnings around the $7,000/day mark. However we are still a way off the recent market lows. In the Nsea and Baltic we have seen some minor adjustments favouring the ice class tonnage ever so slightly. With a well-balanced position list including quite a few oil company relets it’s hard to see this market moving any further at the moment. That being said we should still have another month of ice to go, and the owners are definitely trying to make the most out of it. In the Med and Bsea it’s been yet another uneventful week. The rates have ticked up a couple of points, but the TCE is still so low that it looks like we are in the middle of summer. We expect the rates to increase a couple of more points, but it’s still nothing to write home about.

Chartering - Product

EAST OF SUEZ This week it seems the marked in the Middle East Gulf has developed into a two tiered market for the LR1’s and LR2’s. LR1’s have been able to maintain rates, more or less, around the ws115 mark whilst the lR2’s have seen rate drop from ws120 to ws112,5 and the sentiment for both sizes is soft. For westward destination LR1’s is still obtaining about USD 1,3 mill whilst it is a little bit more difficult to assess rate for LR2’s which is under pressure but we put it about USD 1,8 mill. MR voyage from west coast India to Japan is still at ws135 level. After last week’s rate hike for the short haul voyage from south Korea to Japan owners have seen the rate adjust Slightly downward this week to USD 355’. The MR voyage from Singapore to Japan has added another ws5 points this week and is now at ws145 level. WEST OF SUEZ In the Atlantic it has been a dismal week and rates have dropped for all segments. MR’s trading to States have seen the rate drop from ws140 to ws120 level today and unfortunately it has not helped anything that the back haul voyage from U.S. gulf has also lost momentum and dropped almost w30 points to ws90. Daily earnings for owners triangulating have therefore dropped from USD 16.000 per day to USD 10.000 per day. The LR1’s have not either been able to escape the gloom and rate from Continent to west Africa has slipped to ws90 level. LR2’s loading in the Mediterranean have also been under pressure and the lumpsum rate is today at USD 1,58 mill compared to USD 1,625 last week. For Handies trading on the Continent and in the Mediterranean there has been little change since last week and both segments are trading around the ws155 level.

Activity level

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


DIRTY (Spot WS) This week Last week Low 2018 High 2018
MEG / West VLCC 16.00 16.00 16.00 23.50
MEG / Japan VLCC 35.00 35.00 35.00 50.00
MEG / Singapore VLCC 35.50 35.50 35.50 51.00
WAF / FEAST 260,000 38.00 37.50 37.50 48.50
WAF / USAC 130,000 60.00 67.50 50.00 67.50
Sidi Kerir / W Me 135,000 62.50 65.00 55.00 67.50
N. Afr / Euromed 80,000 90.00 80.00 80.00 110.00
UK / Cont 80,000 97.50 100.00 90.00 107.50
Caribs / USG 70,000 85.00 90.00 80.00 132.50
MEG / Japan 75,000 112.50 120.00 80.00 120.00
MEG / Japan 55,000 115.00 115.00 90.00 115.00
MEG / Japan 30,000 136.00 135.00 110.00 136.00
Singapore / Japan 30,000 145.00 140.00 130.00 145.00
Baltic T/A 60,000 90.00 110.00 90.00 145.00
UKC-Med / States 37,000 120.00 140.00 120.00 165.00
USG / UKC-Med 38,000 90.00 120.00 80.00 135.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 23,500.00 23,500.00 23,500.00 27,500.00
Suezmax (modern) 16,500.00 16,500.00 16,500.00 17,000.00
Aframax (modern) 13,500.00 13,500.00 13,500.00 15,000.00
LR2 105,000 14,250.00 14,250.00 14,250.00 15,000.00
LR1 80,000 13,750.00 13,750.00 13,750.00 13,750.00
MR 47,000 13,550.00 13,750.00 13,550.00 14,000.00
VLCCs fixed all areas last week: 54 previous week: 45
VLCCs avail. in MEG next 30 days: 124 last week: 133

Sales and purchases

Vessel Size Built Buyer Price Comm.
Phoenix 50 546 2006 Undisclosed 15,00
Zhong Jo No. 1 45 719 2008 Singaporean 11,50
Icdas 09 19984 2010 Woodward Group 14,50
Icdas 11 19 984 2011 14,50
DL Ace 10 308 1998 Undisclosed 5,75 Stst