In general, healthy VLCC cargo volumes for most routes were seen last week.
Increased modern tonnage ballasting East/West, speculating on future Americas/East cargoes, diminished the supply of tonnage in the MEG and West Africa regions, Fearnleys reported.
Rates therefore increased for modern VLCCs, both for MEG and West Africa/East. However, earnings still lagged behind and the compensation earned for the surge in bunker costs was minimal.
At the middle of the week, the situation was steady activity and firmer undertones with optimism among owners steadily growing.
Meanwhile, sustained Suezmax activity in the Med and the North Sea has supplemented a fairly quiet West Africa over the past week. Owners have gained some ground with the ever increasing bunker prices being factored in.
Sentiment was generally positive from owners and replacement deals in the Med have added to the upward momentum in rates.
The ‘force majeure’ for Bonny Light is still in place with no imminent sign of it being lifted, and Forcados still has major delays, due to production problems, which took away some stems from the market, Fearnleys said.
TD20 briefly flirted with WS80 last week and is looking likely to go higher in the coming days with the market now focused on end 2nd decade dates.
The TD6 Black Sea has hit the WS100 barrier with TCEs in the high teens – unheard of for many months.
Aframaxes in the North Sea and Baltic got off to a slow start after the holiday weekend, which again put rates under downward pressure.
That being said, expensive bunkers (up to $665 per tonne in Rotterdam) could result in a slightly higher bottom line than was experienced in May.
In the Med and Black Sea, not one fixture was reported this week. Last week ended at WS160, but after the holiday weekend, more tonnage came back into position and charterers did their best to hold back cargoes.
Fearnleys expected rates to come off, but this market should still give owners some decent returns for the rest of the week, the broker concluded.
Elsewhere, brokers reported that Koch had taken the 2017-built LR2 ‘Searunner’ for 15 months at $15,500 per day, while Vitol reportedly fixed the Aframax sisters ‘Kronviken’ and ‘Solviken’ for 12 months at $14,500 per day each.
In the MR segment, Emirates National Oil Co was thought to have fixed the 2007-built ‘Georgia M’ for 12, option 12 months at $13,000 per day, the same rate reportedly paid for the 2013-built ‘Zefyros’ taken by Clearlake, also for 12 months.
In the newbuilding sector, Elandra Tankers was said to have ordered four VLCCs from HHI for 2020 delivery in April.
Elandra Tankers (Singapore) is a joint venture between Vitol and a subsidiary of Standard Chartered Bank.
In the S&P segment, Eurotankers was believed to have snapped up the 2005-built Suezmax ‘United Leadership’ for $15.2 mill, while Sea World Management took the 2007-built LR1 ‘United Banner’ for $10.25 mill in bank orchestrated sales. Her sister, ‘United Carrier’ was said to have gone to undisclosed interests for $10.3 mill.
Expedo Ship Management was believed to have sold four 2005-built LR1s to undisclosed interests for about $11 mill each.
Spring Marine was thought to have purchased the 2010-built MR ‘Nord Intelligence’ for $16.5 mill, while MPC was said to have bought the 2005-built MR ‘Arctic Bridge’ for $12 mill, while Waruna was reported to be the buyers of the Handysize sisters ‘CPO Larisa Athena’ and ‘CPO Larisa Artemis’ (built 2004) for $7.8 mill each in another bank driven sale.
Nordic American Tankers (NAT) said it had sold two of its older Suezmaxes without giving further details.
In another finance deal, Scorpio Tankers (STI) has agreed to sell and leaseback six MRs.
The ‘STI Opera’, ‘STI Virtus’, ‘STI Venere’, ‘STI Aqua’, ‘STI Dama’, and ‘STI Regina’ were committed to China Huarong Shipping Financial Leasing.
Upon the deal’s completion, the company’s liquidity is expected to increase by $48 mill in total after the repayment of outstanding debt. These lease financing arrangements are part of the company’s new financing initiatives that were announced in April.
As part of the agreements, STI will bareboat back the vessels for eight years. In addition, the company has purchase options beginning at the end of the third year of each agreement. There is also a purchase obligation for each vessel upon the expiration of the agreement.
These lease financing arrangements are subject to customary conditions precedent and the execution of definitive documentation, STI said.
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Source: Tanker Operator
