- Greece-based commercial ship management firm Signal Maritime achieved an $8,000-10,000/d increase in its aframax time charter equivalent (TCE) rates for November-December.
- This took place after it repositioned a portion of its fleet from the east of Suez to the west of Suez and achieved an exposure of about 70pc in the latter.
Repositioning the vessels
Repositioning the vessels from east to west of Suez during August-October was a calculated risk, Signal told Argus. It enabled its aframax pool to achieve a net TCE of about $21,100/d and $18,300/d in November and December respectively. Signal manages two pools of 21 aframax and 17 Medium Range size tankers.
The decision to reposition towards west of Suez, specifically the US Gulf coast (USGC) and the Mediterranean, came following a detailed analysis of seasonality in shipping, the effects of the Covid-19 pandemic and vessel supply and demand earlier in the year, Signal said.
August-October crude imports were higher
August’s crude exports from the Mideast Gulf bound to the USGC were at a year’s high of 17.52mn bl, up by 7.31mn bl from July, according to data from Vortexa. August-October crude imports were higher by about 33pc on average from the January-July average to 16.44mn bl in west of Suez markets where there were stronger Covid-19 vaccination rollouts and less large-scale lockdowns.
“Seasonality is the overarching factor, but this needs to be supplemented by the characteristics and suitability of the vessels and also obtaining the appropriate backhaul cargoes, which would be able to minimise risks,” said Signal’s chief commercial officer Ioannis Psarros. “Direct ballasting is usually avoided as risks are high but can be considered if we have little to no vessels in the region,” he added.
Autumn move
“Whilst the autumn move did have an impact on short-term performance, we were able to find attractive backhaul cargoes for the ships’ repositioning from east to west,” said Signal chief executive Panos Dimitracopoulos.
“Our considerable west exposure resulted in long and strong fronthauls significantly lifting our pool partners’ earnings. At the same time we have kept a sufficient local presence through cross-USGC voyages.”
Spot market
The firm also closely monitors the spot market, conscious of when its vessels are the only ones left for a shipment, allowing it to fix rates at the market’s peak prices.
“This awareness can also be applied to delays and waiting times, so while fixture rates may be low, overall earnings could actually be higher, where demurrage comes into play,” Psarros said.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Argus Media
