Friday, June 3, 2016

Markets - VLCC demand picks up

The VLCC market saw renewed demand particularly ex MEG in the last week. 
Although charterers tried to move quietly under the radar, the market turned in favour of the owners, except ex Caribs, Fearnleys reported in its weekly report.

The few cargoes being quoted in the open market ex MEG received limited response, but at firm levels indicating the supply of tonnage up to 20th June is slowly, becoming less.

Presently the fixture count for June is well ahead of the total concluded at same time last month for May liftings.

Owners are counting on strong demand in the third week, as was the case in April and May. They intend to push rates further up, but this remains to be seen, as up to now, May has been more active than the previous months.

Suezmaxes enjoyed a busy week with strong numbers seen in all areas. The initial spike was created by the tight Med/Black Sea market, due to uncertainties as vessels were tied up in French ports.

The Med/Black Sea tonnage list for vessels with firm itineraries was short and as a result, the rates jumped up to W100 level for TD6 voyages.

In W Africa, the ‘force majeure’ active in most of the Nigerian ports was repealed and as a result, deferred barrels entered the market. with laycan up to 25th June. In the Baltic and N Sea areas, rates came off by a few points, mainly due to lack of activity cross North Sea.

In addition, an expected maintenance period at Primorsk added some downward pressure on rates. “We don’t expect rates to soften dramatically, but we could see a small downward correction,” Fearnleys said.

Rates in the Med and Black Sea have finally stabilised at around WS115 level. Black Sea was the most active area, however, at time of writing (Wednesday), more Med cargoes were materialising, thus adding some upward pressure on rates. Quite a few ships still have no firm berthing prospects, partly due to the French strikes and a slow turnaround at Trieste.

The Trieste situation looks like it could slowly be resolved. Consequently, we will see more ships being circulated with firm positions, which could ease the strong momentum if charterers play the coming day’s right, Fearnleys concluded.

Period charter rates look to be softening judging by some of the fixtures reported on brokers’ lists in the past week or so.

For example, the 1999-built VLCC ‘DS Commander’ was reported fixed to HOB for 12 months at $35,250 per day, while unknown charterers were said to have fixed the 2016-built VLCC ‘Landbridge Warrior’ for three years T $35,000 per day.

Vitol was believed to have fixed the 2010-built LR2 ‘Totonno Bottiglieri’ for 12 months at $24,000 per day.

In the MR segment, HPCL was rumoured to have fixed the 2005-built ‘Jag Pranav’ for 12 months at 17,000 per day, while Shell was thought to have taken the 2009-built ‘MR Pegasus’ for 3-6 months at $16,750 per day and ST Shipping was thought to have fixed the 2003-built MR ‘MTM Mumbai’ for six months at $16,000 per day.

The 2009-built Handysize ‘Atlantic Canyon’ was thought fixed to Signal Maritime for two years with an option for a further year at $13,500 per day.

In the S&P sector, having purchased four Handysize vessels, CP Offen Tankschiffarts was thought to have disposed of the MRs ‘CPO Japan’ (built 2010) and the ‘CPO Korea’ (built 2009) to UK-based Union Maritime for an en bloc price of $46 mill. This transaction may still be on subjects.

Also on subjects were believed to be the two 2008-built MRs ‘Batissa’ and ‘Bursa’ to unknown interests for $22 mill each.

The 2011-built VLCC ‘C Elephant’ was said to have been sold to Greek interests, believed to be involved with Minerva for about $55.6 mill.

Reported to be leaving the fleet were the 1986-built sister parcel tankers ‘Stolt Aqumarine’ and ‘Stolt Topaz’, both reportedly sold to Indian breakers for $270 per ldt each.

Deliveries included the fifth of five MRs sold by Scorpio Tankers to National Chemical Carriers (NCC), a subsidiary of the National Shipping Company of Saudi Arabia (Bahri).

The vessel was delivered on 26th May, the ownership was transferred to NCC and the tanker was renamed ‘NCC Bader’.

All five vessels were built in 2014 at Hyundai Mipo Dockyard for Scorpio Tankers and were bought for a total purchase price of $166.5 mill earlier this year.

Elsewhere, Tristar has taken delivery of the first of six MRs from Hyundai Mipo - ‘Silver Manoora’. 
They are being built on the back of long term timecharters to Shell.

Newbuildings were scarce with just two VLGCs reported ordered by NYK at Japan Marine United (JMU).

The 84,000 cu m vessels are due for delivery in January, 2019 and are priced at $75 mill, according to brokers’ reports.

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