Monday, November 3, 2014

Markets - Charter rates go north

File VLCC Tankship DHT Ann: Photo courtesy of DHT

VLCCs firming trend during the past week, or so, with continuous high activity into November has pushed rates up and earnings for MEG/East routes well into $40,000s per day.
Fearnleys said that owners’ expectations for the winter market are running high. They have set their sights on pushing rates further.

Tonnage is becoming tighter both for MEG and also West African cargoes, helping to sustain the generally firm trend.

With present earnings, waiting days are getting more ‘expensive’ thus owners may elect to lock in their preferred voyages on their dates, which may flatten the forward rate-curve to some extent. However, optimism is however strong for the VLCCs in general.

After a dip in Suezmax rates, particularly from West Africa (down to WS 65) at the beginning of the week, interest from charterers picked up again and owners bullishness increased.

There are several charterers working in the same laycan window in West Africa and we expect this market to improve even further, Fearnleys said.

The stem programme from Black Sea/Med seems lighter than last month, however, with firmer rates in the major Suezmax West Africa/West route, we expect rates to follow the upward trend in this area as well.

The Aframax market in the West saw continuous high activity this week and the trend is very firm in all the three major trade regions; Baltic/North Sea, Black Sea/Med and the Caribs.

Owners optimism has not been curbed, despite an expected maintenance period in Primorsk/Ust-Luga from 10-15th November.

The North Sea/Baltic and Black Sea/Med markets have more of an upside, as Russian stem programmes for remainder of November looks quite extensive.

We expect this firm trend to be sustained, as with a more uncertain weather prospect expected as winter approaches, bringing more weather delays.

The newbuilding sector remains lacklustre with just four contracts reported recently.

These for for two 22,000 cu m LPG carriers for Navigator at Hyundai Mipo and two 35,000 dwt chemical carriers at Kitanihon for Tokyo Marine.

Returning to the timecharter market, brokers reported that Clearlake had fixed the 2007-built Aframax sisters ‘Aegean Nobility’ and ‘Aegean Power’ for 30 months at $20,000 per day each, while Shell was believed to have taken the same vintage Aframax ‘Bergina’ for 12 months at $17,000 per day.

Illustrating the strength of the LR1s at present, Petrobras was believed to have locked in the 2008-built Tsakos sisters ‘Selecao’ and ‘Socrates’ for two years at $16,450 per day each.

In the MR sector, Morgan Stanley was said to have chartered the 2005-built ‘Apollon’ for three, plus three months at $13,950 per day, while Koch was believed to have fixed the 2008-built ‘Prisco Alexandra’ for 12 months at $14,000 per day.

Reported sales were few and far between with the 2000-built MR sisters ‘Risanger’ and ‘Ravnanger’ reportedly sold to unknown interests for $10.25 mill each.

Leaving the fleet was the 1991-built Aframax ‘Europrogress’ sold to Pakistani interests on private terms. 

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