Fearnleys Weekly - Tankers

Chartering - Crude

After a slow end of last and the beginning of this week , activity has picked up for the VLCC’s. Rates in the MEG have been under constant bombardment as ships remain ample but many have chosen the younger sister the last days. Rates appear to have found support in the low 50s. Wafr/East much the same where w50 was done but has found some increased resistance. Its summer in many ways. Sparse activity has been the challenge for Suezmax owners in the west over the past week with the MEG dominating the action east of Suez, this did however result in a thinning of the east ballasters for WAfr. At the latter part of last week we saw owners sentiment developing into a cautiously bullish tone with expectations that there would be a busier week ahead, TD20 had peaked at ws 67.5 albeit briefly. However the expected action on 2nd decade dates early this week failed to materialise and the view is that we will see rates slipping back towards ws 60 before the week is out. TD6 has also had a very quiet period with 1st decade August dates being slowly worked both west and east destinations being fixed but there was not enough impetus to. The outlook for the week ahead is steady to soft with owners looking to keep tonnage moving and fixing closest to their dates. After a short lived spike on rates for Aframaxes trading in the Nsea and Baltic areas, charterers are back in the driving seat. Entering the next fixing window we will most likely see a downward correction on rates as there are not enough cargoes to absorb the abundance of available tonnage building up in the area. The med and bsea have for the past few weeks been a stable pattern of Owners fighting their way back to low w90 for Petrogal to come inn and crush it back down again. This time around it was an ex dd that took the hit and accepted w75 for one of the Mediterranean’s longest runs. However even if that run might look ok for this particular Owner, the fact is that for the rest of them, mid w80’s is the new number for other xmed and bsea voyages. Expect this to continue this week and over to the next.

Chartering - Product

EAST OF SUEZ Finally there are some good news for owners trading in the Middle East Gulf. Owners of both LR1’s and LR2’s have been able to secure higher rates this week. The rate for LR2’s going to the Far East have improved from ws92,5 last week to ws117,5, so for the first time in a long time owners are seeing earnings in the 5 digit range. LR1’s have also experienced higher activity and have been able to push rate upwards to ws117,5 a ws10 points increase from last week. The rate for westward destinations have also as a consequence increased to lumpsum USD 1,45 for LR2 and USD 1,175 for LR1’s. The MR’s in the region have also starting to see some improvements and the standard voyage from west coast India to far east has gained ws5 points to ws137,5 today. In the Far East owners have not had the opportunity to increase rates and the Singapore to Japan voyage basis 30.000 tons is still at ws150 level and the short haul voyage from south Korea to Japan is still USD 27.000 level. WEST OF SUEZ In comparison the market in the Atlantic has been flat and even softening. For MR’s trading to the States the rate of ws122,5 is unchanged from last week but the back haul rate from U.S. gulf has dropped ws15 points so daily earnings have dropped from about USD 11.250 per day to USD 9.000 per day. LR1’s operating in the Atlantic have been able to maintain the rate for west Africa discharge at ws125. Unfortunately the uptick in rates for the LR2’s fixing from the Mediterranean to Far East have come to an end and we are today back at lumpsum 1,8 mill USD 75.000 less than last week. It has also been a slow week for Handies trading on the Continent and in the Mediterranean and the rate remains at ws140 and ws125, respectively

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 23.00 24.00 23.00 60.00
MEG / Japan VLCC 51.00 50.00 45.00 96.50
MEG / Singapore VLCC 52.00 51.00 45.00 96.00
WAF / FEAST 260,000 52.00 50.00 50.00 97.50
WAF / USAC 130,000 60.00 57.50 52.50 117.50
Sidi Kerir / W Me 135,000 70.00 62.50 62.50 117.50
N. Afr / Euromed 80,000 90.00 90.00 72.50 190.00
UK / Cont 80,000 85.00 90.00 85.00 117.50
Caribs / USG 70,000 100.00 92.50 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 117.50 92.50 80.00 155.00
MEG / Japan 55,000 117.50 107.50 100.00 150.00
MEG / Japan 30,000 137.50 132.50 120.00 167.50
Singapore / Japan 30,000 147.50 150.00 130.00 180.00
Baltic T/A 60,000 125.00 125.00 100.00 155.00
UKC-Med / States 37,000 120.00 125.00 120.00 210.00
USG / UKC-Med 38,000 90.00 105.00 80.00 150.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 27,500.00 27,500.00 27,000.00 30,000.00
Suezmax (modern) 17,000.00 17,000.00 17,000.00 22,800.00
Aframax (modern) 15,000.00 15,500.00 15,000.00 18,500.00
LR2 105,000 15,500.00 15,500.00 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: 64 previous week: 28
VLCCs avail. in MEG next 30 days: 135 last week: 129

Sales and purchases

Vessel Size Built Buyer Price Comm.
Front Ardenne 153 152 1997 Undisclosed 8,00
Gener8 Phoenix 153 015 1999 Undisclosed 10,50
Gener8 Horn 159 475 1999 Undisclosed 10,50
Resolve 46 048 2004 Undisclosed 11,00