Increased VLCC activity was seen for all the major routes last week.
However, rates softened sharply as VLCC earnings dipped well below $10,000 per day for MEG/East voyages, Fearnleys reported.
Tonnage was in abundance and continued high cargo volumes will be required for some time to balance the tonnage list.
By mid-week (Wednesday), rates may have bottomed out, but any major increases from present levels will be a long and hard upward struggle.
Suezmaxes finally found a little improvement. The past week was more fluid in terms of cargoes entering the market, which shifted some of the tonnage backlog.
The tide started to turn last week in West Africa when owners began to resist voyages with higher port costs, refused to accept last done levels and insisted on a premium, thus allowing earnings to return to positive territory, Fearnleys reported.
Momentum built from there with the Med and Black Sea both seeing increased activity. A CPC-UK/Cont/Med replacement deal was concluded at WS80.
The end of the month window in West Africa is likely to see a limited upward trend, however charterers will probably sit back on early March dates in order to put a cap on further market potential upside.
In the North Sea and Baltic, the Aframax market hovered around the bottom levels with earnings closer to zero for most owners. Oil company relets have lifted a big percentage of the cargo volumes in both areas and, as a result, kept other owners at bay.
There is still a lot of available tonnage to be mopped up before any improvement will be seen.
In the Med and Black Sea, the market was steady above WS100 last week. Going into this week the tonnage list looked longer and with Petrogal quoting the market, rates dropped significantly.
We have seen rates below WS100 being agreed, both from Black Sea and for cross-Med trips. For the rest of the week we expect the market to stabilise in the mid WS90’s, Fearnleys concluded.
Brokers reported that the 2013-built LR2 ‘Densa Alligator’ was fixed to Shell for six, option six, months at $14,300 and $15,200 per day for the option period, while Lukoil was said to have taken the 2012-built ‘Tian E Zhuo’ for 12 months at $13,500 per day.
In the MR segment, ENI was thought to have fixed the 2010-built ‘Gazia’ for 12 months at $13,750 per day and Repsol was said to have taken the 2015-built ‘Amadeus’ for 12 months at $14,750 per day.
MOL was believed to have fixed the 2017-built MR ‘Panagia Thalassini’ for 12 months at a relatively high $17,200 per day, while Shell was said to have taken the 2006-built Handysize ‘Asturas’ for 12 months at $13,500 per day.
In the newbuilding sector, TORM was said to have ordered two LR1s at GSI for about $38 mill each for 2020 deliveries, while Pantheon was believed to have declared another two MR options at STX for $33 mill each.
Turning to the S&P sector, the 2004-built VLCC ‘Kai-Ei’ was believed sold to Pertamina on long subjects on the back of winning a tender.
The 2005-built ‘Arctic Bridge’ was thought committed to Norwegian interests for $12.9 mill.