Fearnleys Weekly - Tankers

Chartering - Crude

For the VLCCs in general activity has slowed dramatically. In Meg we are between months with abt 120 done for April which should still leave some to do. May stem-confirmations not expected till probably over the weekend. Wafr activity far from sufficient as well and rates in general under pressure for all major routes. Earnings Meg and Wafr east again dipped below $10k/day and hard to see any major upswings this side of the summer. The Suezmaxes saw a steady flow of cargoes after the Easter break, the amount of volume in all geographical areas gave owners a bit of false optimism and there was a slightly more bullish tone from hungry owners who had a choice of cargoes rolling on from the pre Easter condensed week. The area that has been most prolific with activity of late has been Meg which has seen large volumes moving with most barrels having West destinations. Wafr for this week so far has been taking a back seat and TD20 has found its level at w55 and currently steady. The Bsea has ticked off its highs currently down to w77.5 for TD6, this has potential to soften further in the week ahead with no significant delays at present in the Turkish Straits. An increasing oil price has pushed up bunkers putting further pressure on the meagre TCE’s. Charterers have been holding back their Nsea and Baltic cargoes for some time, and a result of that we had a rush of fixing this week. That has resulted in a an upward correction, and at the time of writing there’s 4 cargoes working in similar window. Owners are as we all know “starving” and will by now automatically dig their heels in and ask for more. There is still plenty of cargoes in the natural fixing window, and will be interesting to see if this trend continues into May laycans. In the Med and Bsea we have what feels like an endless list of tonnage ready to fix. Owners are now waiving the white flag, as the returns on a cross Med voyage are zero at best. We are still fixing in the mid 70’s both for Bsea and Ceyhan load, but even though we are seeing a decent amount of cargoes, we don’t expect much to happen ratewise.

Chartering - Product

EAST OF SUEZ It is a slow week and the lack of interest from charterers have once again put downward pressure on rates in The Middle East Gulf. LR2’s fixing for Far East discharge are today getting about ws92,5 for their services while LR1’s are obtaining ws110, a reduction of ws5 points since last week and still the market is softish. For both sizes rates for going westwards have also declined and today about USD 1,750 mill for Continent discharge is paid for an LR2 and USD 1,325 mill for an LR1. MR’s have also had a disappointing week and rates for Japan discharge is down to ws132,5 this week. In the far east the short haul voyage from South Korea to Japan has bounced back to USD 370.000 mark after a drop to USD 335.000 last week. The MR voyage from Singapore to Japan is still at ws145 level unchanged from last week. WEST OF SUEZ Until yesterday markets in the Atlantic had been quiet and stable but then the gasoline trade to the States took off and rates For MR’s went from ws102,5 to ws122,5 by the end of the day. The back haul cargo from the U.S. gulf has been stable at Around ws82,5 level. With the latest uptick in rates for the straight Continent to States voyage and combined with the back haul Owners have seen their daily earnings increase from USD 7.500 to USD 8.500 per day. Still no impact for the LR1’s trading in the Atlantic and the rate for Continent to west Africa is still at ws80. Rates for LR2’s loading in the Mediterranean for far east Discharge is still slowly crawling upwards and today rate in just north of USD 1,7 mill. Handies in the Mediterranean is today trading at ws135 levels down from ws145 and on the Continent their sisters are trading at Ws135 level down from ws155 last week

Activity level

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

Rates

DIRTY (Spot WS) This week Last week Low 2018 High 2018
MEG / West VLCC 19.00 20.00 16.00 23.50
MEG / Japan VLCC 41.00 46.50 35.00 50.00
MEG / Singapore VLCC 42.00 47.50 35.50 51.00
WAF / FEAST 260,000 41.00 45.00 37.50 48.50
WAF / USAC 130,000 52.50 55.00 50.00 67.50
Sidi Kerir / W Me 135,000 72.50 70.00 55.00 72.50
N. Afr / Euromed 80,000 75.00 77.50 75.00 110.00
UK / Cont 80,000 90.00 90.00 90.00 107.50
Caribs / USG 70,000 95.00 100.00 80.00 132.50
CLEAN (Spot WS)
MEG / Japan 75,000 92.50 100.00 80.00 120.00
MEG / Japan 55,000 110.00 115.00 90.00 115.00
MEG / Japan 30,000 132.50 140.00 110.00 140.00
Singapore / Japan 30,000 145.00 147.50 130.00 147.50
Baltic T/A 60,000 80.00 80.00 80.00 145.00
UKC-Med / States 37,000 125.00 112.50 112.50 165.00
USG / UKC-Med 38,000 82.50 82.50 80.00 135.00
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 22,500.00 22,500.00 22,500.00 27,500.00
Suezmax (modern) 16,000.00 16,250.00 16,000.00 17,000.00
Aframax (modern) 13,500.00 13,500.00 13,500.00 15,000.00
LR2 105,000 14,500.00 14,500.00 14,250.00 15,000.00
LR1 80,000 13,750.00 13,750.00 13,750.00 13,750.00
MR 47,000 13,750.00 13,750.00 13,550.00 14,000.00
VLCCs fixed all areas last week: 47 previous week: 41
VLCCs avail. in MEG next 30 days: 111 last week: 129

Sales and purchases

Vessel Size Built Buyer Price Comm.
Vega Trader 299 985 2003 New Shipping 21,5
Sinar Emas 18 010 2000 Undiscosed 6,90
Dreggen 19 994 2008 Undisclosed 15,75