Fearnleys Weekly - Tankers

Chartering - Crude

The VLCC market saw more activity and increasing rates ex MEG during end last week, which to owners’ disappointment dwindled last few days due to less demand in the spot market. The market needs to see more action to avoid rate levels to start easing off again. Owners are hoping the BOT stem nominations, which are to be released soon, will support their cause, but on the other side the supply situation looks pretty amble. It was a game of patience for the charterers in the Suezmax market, throughout last week there was sustained pressure from key owners driving a bullish sentiment sitting back and showing high numbers against cargoes due to tightening lists reflecting some pressure on fundamentals especially in West Africa with increased volumes of cargo steadily poaching tonnage. Finally one by one owners succumbed realising that there was very little to support any upward movement in the rates and by the end of last week stability had returned with last done levels being achieved at ws65 for TD 20 as the market found its balance. The Med and Black Sea have seen limited enquiry and stability has prevailed there too with TD6 going sideways at ws75. This week has started on a quieter note with first decade of August dates in Waf being lighter than last month, stable is the trend going forward and time will tell if charterers can find a way to squeeze owners further. North Sea and Baltic keeps moving sideways at bottom levels as charterers are fixing further forward than what we have seen recently. The tonnage list is thinning out, but nevertheless we expect the rates to stay unchanged and the week to end on a quiet note. In the Med and Bsea, owners can finally see some positive signs in the market. High cargo activity last week have thinned out what seemed to be an endless tonnage list, and as a consequence the owners are now pushing for higher numbers. At the time of writing ws80 is the going rate, but as we have fixed far forward, and there still are some prompt ships left on the list, we do not expect rates to go much further for the time being.

Chartering - Product

EAST OF SUEZ It has more or less been a flat week in the Middle East Gulf with the exception of the LR1s, which have had to accept a ws5 points reduction this week for Far East destinations, whilst the LR2s are still steadily being fixed around the ws95 mark. For Continent destination owners of LR1s and LR2s have had to reduce their rates with about USD 50,000 to USD 1.175 mill and USD 1.375 mill, respectively. The standard MR voyage from West Coast India to South Korea/Japan range is still at ws145. Owners have experienced the same flat market in the Far East. The standard MR voyage from Singapore to Japan is still at ws145 level and the short haul voyage from South Korea to Japan is still USD 270,000. WEST OF SUEZ Owners have had a much more positive week in the western hemisphere. The biggest rate gain has been for the LR1s fixing for West Africa where the rate has improved from ws105 to ws125 today. MRs trading to the States have also been able to put some pressure on the charterers and rates have moved from ws125 to ws135. The back haul cargo from US Gulf to Continent is unchanged at ws115. For MR owners triangulating in the Atlantic the daily earnings have improved from about USD 12,440 to USD 13,500. LR2s have also seen a turn for the positive with rates from Mediterranean to the Far East increase about USD 100,000 to lumpsum USD 1.8 mill. Handies trading on the Continent have seen rate drop some ws20 point to ws140 level, whilst rates for handies trading in the Mediterranean is still at ws140.

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2017 High 2017
MEG / West VLCC 26.00 25.50 23.00 60.00
MEG / Japan VLCC 55.00 52.50 45.00 96.50
MEG / Singapore VLCC 56.00 53.00 45.00 96.00
WAF / FEAST 260,000 56.00 55.50 53.00 97.50
WAF / USAC 130,000 62.50 62.50 52.50 117.50
Sidi Kerir / W Me 135,000 67.50 65.00 62.50 117.50
N. Afr / Euromed 80,000 80.00 72.50 72.50 190.00
UK / Cont 80,000 90.00 87.50 87.50 117.50
Caribs / USG 70,000 82.50 87.50 82.50 215.00
CLEAN (Spot WS)
MEG / Japan 75,000 95.00 92.50 80.00 155.00
MEG / Japan 55,000 112.50 117.50 100.00 150.00
MEG / Japan 30,000 135.00 135.00 120.00 167.50
Singapore / Japan 30,000 145.00 145.00 130.00 180.00
Baltic T/A 60,000 125.00 105.00 100.00 155.00
UKC-Med / States 37,000 135.00 125.00 120.00 210.00
USG / UKC-Med 38,000 115.00 115.00 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) 17,500.00 17,500.00 17,500.00 22,800.00
Aframax (modern) 15,500.00 15,500.00 15,500.00 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: 46 previous week: 36
VLCCs avail. in MEG next 30 days: 122 last week: 119

Sales and purchases

Vessel Size Built Buyer Price Comm.
Amba Bhavanee 107 081 2003 Undisclosed 5,60 Auction sale, out of class
Gener8 Pericles 105 674 2003 Far Eastern 11,70
Marlin 46 145 2000 Indian Undisclosed
Torea 40 000 2004 Far Eastern 10,80
Oriental Clematis 14 227 2006 Far Eastern 14,00 StSt
Sun Jupiter 8 833 2002 Far Eastern 6,50 StSt