VLCCs saw more activity and increasing rates ex MEG during the end last week.
However, disappointingly for owners, activity dwindled in the past few
days, due to less demand in the spot market, Fearnleys reported.
The market needs to see more action to avoid rate levels starting to
ease off again. Owners are hoping that the soon to be released BOT stem
nominations will support them, but on the other hand, the supply
situation looks ample.
For charterers, it was a game of patience in the Suezmax market.
Throughout last week, there was sustained pressure from key owners
driving a bullish sentiment, due to tightening lists reflecting some
pressure on fundamentals, especially in West Africa with increased
volumes of cargo steadily eroding tonnage.
Finally, one by one owners realised that there was very little to
support any rate upward movement and by the end of last week, stability
had returned with last done levels being achieved at WS65 for TD 20, as
the market found a balance.
The Med and Black Sea saw limited enquiry and stability has also prevailed with TD6 going sideways at WS75.
This week has started on a quieter note with first decade of August
dates in West Africa being lighter than last month. The trend going
forward is stable and time will tell if charterers can find a way to
squeeze owners further.
North Sea and Baltic kept moving sideways at bottom levels, as
charterers fixed further forward than has been seen recently. The
tonnage list is thinning out, but nevertheless, we expect rates to stay
unchanged and the week to end on a quiet note.
In the Med and Black Sea, owners finally saw some positive market
signs. High cargo activity last week thinned out what seemed to be an
endless tonnage list, and as a result, owners are now pushing for higher
numbers.
At the time of writing (Wednesday) WS80 was the going rate, but as we
have fixed far forward, and there still are some prompt ships left on
the list, we do not expect rates to go much further for the time being,
Fearnleys concluded.
Turning to Asian product tanker trades, Ocean Freight Exchange (OFE)
said while this segment may not be as dire as the crude tanker sector,
newbuilding deliveries are expected to continue to keep a lid on product
tanker rates in Asia over the third quarter of this year.
The pace of deliveries is expected to pick up in 2H17, bringing the net
fleet growth this year to 3-4%. Around 30% of the expected LR2
newbuilding deliveries and 25% of expected LR1 deliveries this year have
already entered service.
On the demand side, higher June and July naphtha inflows from the West
on the back of a wide East/West spread have led to a build-up in buyers’
inventories. As such, this is likely to displace some flows into Asia,
resulting in less movements along the benchmark AG/Japan route and
further pressuring LR rates in 3Q17, OFE said.
According to Platts, around 1.2 - 1.3 mill tonnes of European naphtha
is expected to arrive in Asia in July (flat month-on-month), almost 20%
higher than the year-to-date monthly average of 1.02 mill tonnes.
Moreover, while North Asian naphtha import volumes are relatively
steady, naphtha imports into China have been dropping steadily, due to
increased domestic output. Chinese naphtha imports during January - May
were down by 22.2% year-on-year to 154,000 barrels per day, and are
expected to continue easing over 3Q17.
The strength in the Asian gasoil market has led to a persistently
strong EFS, which has kept the East/West arb closed this year, resulting
in less LRs moving along the key AG/Europe routes. This is expected to
continue to weigh on the Asian LR market in the third quarter.
Things look a little brighter for the Asian MR segment, which has
recently rebounded from multi-year lows. Chinese product exports in
3Q17 are likely to be supported by the recent release of the third batch
of fuel export quotas, the conclusion of the refinery maintenance
season, as well as lower domestic demand for gasoil, due to a nationwide
fishing ban.
The third batch of fuel export quotas (under both processing trade and
general trade terms) stand at 15.4 mill tonnes, which is 231% higher
than the previous batch and 152% higher year-on-year.
This leaves much room for exports to grow in the third quarter, which could help to keep a floor under MR rates, OFE concluded.
TOP Ships announced this week that it had entered into two joint
venture agreements, on a 50:50 basis, with trading house Gunvor Group
for two 50,000 dwt product tankers ‘Eco Holmby Hills’ and ‘Eco Palm
Springs’, currently under construction at Hyundai with expected
deliveries in the first and second quarters of 2018, respectively.
The company had previously announced that it had acquired 49% of each
vessel and prior to entering into the joint ventures, increased its
shareholding to 50%.
Top Ships also announced that upon their delivery from Hyundai, they
will enter into timecharter employment with Clearlake Shipping, a
subsidiary of Gunvor for three years firm, plus two additional optional
years.
The total potential gross revenue backlog from these contracts is estimated to be about $55 mill.
Company CEO, Evangelos Pistiolis, commented: “The joint ventures with
Gunvor Group represent a major milestone for Top Ships and we expect
that this partnership will create a lot of synergies that will be
beneficial for both parties.”
Odfjell confirmed that the transaction to acquire five stainless steel
newbuildings and its intention to form a pool of 15 x 25,000 dwt vessels
has been completed.
The first vessel will be delivered on 14th July, 2017 and the remaining
four newbuildings will be delivered intermittently to May, 2018.
Odfjell said that the five wholly-owned newbuildings and the formation
of the pool are expected to have a positive contribution on its returns
and will strengthen its position and competitiveness in the current
state of the chemical tanker market.
In the charter market, brokers reported that the 2003-built VLCC
‘Voyager 1’ had been fixed to Shell for three months at $19,000 per day
with an option for a further six months at $20,000 per day.
Trafigura was said to have fixed the 2007-built VLCC ‘Gener8 Atlas’ for one to two months at $23,000 per day.
In the MR segment, Cargill was believed to have taken the 2012-built
‘Miss Benedetta’ for two to five months at $13,500 per day, while Navig8
Product Tankers was thought to have fixed the 2009-built sisters
‘Navig8 Strength’ and ‘Navig8 Success’ for 12 months at $11,500 per day
each with options for a further 12 months at $13,500 per day.
Turning to S&P deals, the 2003-built Aframax ‘Amba Bhavanee’ was
sold at auction for $5.6 mill. The vessel is out of class and has been
idle at Aruba since 2013.
Another Aframax, the 2003-built ‘Gener8 Pericles’ was thought committed to Far East interests at $11.7 mill.
The1998-built MR ‘Maritime Yuan’ was said to have been sold to
undisclosed interests for $4.5 mill, while the 2002-built MR ‘Jenny’ was
reportedly sold to Indian interests for $10 mill with her special
survey passed.
The 2002-built Handysize ‘Acquaviva’ was sold for $9.5 mill to Nigerian
interests identified as Matrix, while the 2004-built Handysize was
thought sold to Indonesian interests for $10.8 mill.
Leaving the fleet were the 1993-built VLCCs ‘Aura’ and ‘Bright’ said to
have been sold for $330 per ldt each to unknown breakers on the basis
of ‘as is’ Khor Fakkan.
The 1997-built Suezmax ‘Blue Trader’ was thought sold to Bangladesh
breakers for $378 per ldt on the basis of ‘as is’ Singapore.
Finally, in the newbuilding sector, Central Shipping ordered two,
option two LR2s at Hanjin for $50 mill each. The high price was said to
be down to their very high specifications. They are due to be delivered
in 2019.
Daewoo Shipbuilding & Marine Engineering is to build another four
VLCCs for Maran Tankers Management, according to Yonhap News.
DSME will deliver the 318,000 dwt vessels by 20th August, 2019, the shipbuilder said in a regulatory filing, the news agency said.
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