The VLCC market took a turn for the worse this week, as activity slowed in all areas and ships piled up.

Markets - VLCC activity slows

Mar 29 2019

Charterers received double digit offers, but initially at below last done levels. 

Thus, we expect rates to drop further as the week progresses, and owners could find themselves trading at OPEX levels before long, Fearnleys said in its weekly roundup.

At the time of writing (Wednesday), WS45 was concluded with a ship older than 15 years for MEG/East, and modern tonnage will probably follow suit soon.

In contrast, Suezmaxes saw fairly good activity in the West last week, and finally the tonnage list for cargoes out of West Africa on natural dates looked more healthy.

Rates are still scraping the bottom of what owners consider to be beneficiary, compared to anchoring and waiting for better times. At least now, we could see a slight improvement going forward, Fearnleys said.

On the other hand, in the MEG, there were not many positive signs for owners going forward. The list of available tonnage is increasing, and even in a tight window for ships fitted with 20 tonne hose cranes, owners did not manage to capitalise.

Activity in the area still remains decent, but not to the extent where something will happen rate wise.

In the Black Sea, rates are also softening, with last done on TD6 at WS60. This is not unexpected as the Turkish Strait delays are down to three to four days each way.

Turning to Aframaxes, rates in the North Sea and Baltic took a big hit this week as activity slowed down and there was an abundance of available tonnage offering up for the few cargoes in the market.

Rates have hit the bottom for now with TCE nearly covering OPEX.

We expect these markets to move sideways as we currently see very little support from surrounding markets pointing to any firming in the near future, the broker said.

Although the unbalance between supply and demand in the Mediterranean and Black Sea continues with prompt open ships rolling over from last week, cargo activity was healthy enough to see the market trade sideways.

TD19 is currently at around WS90 levels, and we have seen a few ships fixing fuel cargoes and leaving the market heading East.

Congestion in the Turkish Straits is finally easing, resulting in the transit time coming down from eight days during the middle of last week to three to four days by the middle of this week, Fearnleys concluded.

Brokers have reported the charter of the 2019-built Aframax ‘BW Despina’ for 12 months at $22,000 per day.

Shell has reportedly shipped the first condensate cargo from FLNG ‘Prelude’ moored off Broome in Western Australia.

The Aframax ‘Advantage Atom’ arrived at the FLNG from Singapore, according to MarineTraffic’s vessel tracking data. 

Three stern thrusters enable ‘Prelude’ to maintain an optimum heading for offtake operations. The FLNG is fitted with the necessary equipment for exporting LNG/LPG via alongside mooring using loading arms and condensate via a tandem mooring and floating hose system.

d’Amico International Shipping’s subsidiary d’Amico Tankers has signed a memorandum of agreement and a 10-year bareboat charter contract for the sale and lease back of the 2014-built MR ‘High Voyager’ for $25.7 mill.

This transaction allows d’Amico Tankers to generate at the vessel’s delivery around $9.6 mill in cash, net of commissions and the reimbursement of the vessel’s existing loan,contributing to the liquidity required to complete DIS’ fleet renewal programme and allow the company to benefit from the anticipated market recovery.

Brokers reported that Navios Maritime had sold the 2000-built VLCC ‘C. Dream’ to Chinese buyers at an undisclosed price. Target Marine has committed the Aframax ‘Voyager C’ built 2003 to UAE based buyers for $13,2 mill.

Another Aframax, the 2003-built ‘Gardenia’ was believed sold to Indonesian interests for $13.2 mill, while the veteran 1999-built LR2 ‘Vermilion Energy’ was sdaid to have been sold to Qatari buyers for $7.9 mill.

HSM Products reportedly committed the 2007-built MR ‘Mr Sirius’ to German buyers at around $14-14,5 mill. In addition, Qatar Shipping committed two 2003-built MRs ‘Jinan’ and ‘Dukhan’ to Greek buyers for $15 mill en bloc.

The 2018-built MR ‘Desert Mariner’ was reported sold to JP Morgan for around $29 mill. She has a timecharter attached to Cargill for five, option one, option one years at $14,500/$15,000/$15,500 per day.

In the newbuilding sector, a large series of MRs was ordered on the back of long term Shell charters. Shandong Shipping was said to have contracted 10, plus six options at Hyundai Mipo for about $36-$37 mill each against seven year charters for in the region of $16,500 per day per vessel, plus options to extend the charters.

In addition, an undisclosed interest ordered four, plus two, plus two MRs at HMD on the back of Shell’s project Solar, which calls for the construction of up to 30 MRs.

Reports were coming in that Eastern Pacific had ordered up to eight LR2s at New Times.