VLCC Markets - Rate pressures continue

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A week with very low VLCC charter volumes increased the pressure on rates resulting in softening on some routes. 

 

The MEG August programme is about to start in earnest, but the tonnage list has grown considerably and charterers are ambitious, Fearnleys said in its weekly report.

WAfrica/East was in a similar position with rates down on the back of sluggish activity. There is no immediate crash on the horizon, but rates were under severe attack, Fearnleys said.

The Suezmax market developed a more steady note and settled into a summer mode with TD20 hovering around WS60. In WAfrica, end 3rd decade dates were mopped up by charterers during the latter part of last week. 

Some aggressive charterers even reached out to early second decade August dates with low rate ideas and were successful in capturing tonnage at below last done for named voyages to the US Gulf.

It is hard to build a bullish picture for owners at present although is expected that WAfrican activity will pick up next week for 1st decade August and owners will be keen to reignite the sentiment flame if there is a flood of cargoes.

Fundamentals in both the Med and Black Sea are pointing to a steady week ahead but charterers will need to drip feed the market to keep enthusiasm at bay, as currently TCE rates are paltry at best.

There was very good Aframax activity in the North this week. Thus far, rates remain at last done, ie WS62.5 ex Baltic and WS90 for cross North Sea voyages.

However, owners are holding back a bit aiming for higher than last done in the current fixing window. We expect this market to gain a few points for end/early fixing dates, Fearnleys said.

Last week, an increase in Med and Black Sea activity was seen. The position list slowly became tighter and as such, owners managed to push rates into the low WS90s.

An increasing amount of Libya cargoes was a key-factor and this may continue into August. However, this alone will not be enough to keep rates firming. Expect the rates to flow between WS80s and WS90s, Fearnleys concluded.

In the charter market, timecharter rates were not very exciting. For example, brokers reported that SOLAL had fixed the 2003-built Aframax ‘Atlas Voyager’ for six months at $14,500 per day.

MRs fared little better with NORDEN reportedly fixing the 2007-built ‘DL Cosmos’ for 12 months at $12,750 per day and Litasco taking the 2012-built ‘Grand Ace 12’ for six, option six months at the same rate.

In the S&P market, brokers were circulating the 1998-built sister Aframaxes ‘Moscow’ and ‘Moscow Kremlin’ for sale for around $14.2 mill each.

Elsewhere, the 2003-built Aframax ‘Seaborne’ was thought to be on subs to Indonesian interests at $10.9 mill, while Pantheon Tankers was said to have purchased the 2011-built ‘Phoenix Advance’ for $28.3 mill.

The 2006-built MR ‘PTI Volans’ was believed committed to Island Navigation for $15.3 mill.

Reported leaving the fleet were the 1990-built Aframax ‘Iron Monger 3’ believed sold to undisclosed breakers for $340 per ldt on the basis of ‘as is’ Khor Fakkan and the 1997-built Aframax ‘Bunga Kelana Dua’ thought sold to undisclosed breakers for $398 per ldt, ‘as is’ Malaysia.

As for newbuildings, three Japanese companies were said to have ordered two Tier II MRs each at Hyundai Vinashin for $32 mill per ship on the back of long term charters to NORDEN.