Market Chat: Week 9

Credits: EXTREME-PHOTOGRAPHER/Getty Images/iStock

Global Clean Tanker trade from Russia climbs

Prior to the restrictions on Russian Clean Products taking effect on February 5, 2023, cargo kilometres from Russia to the world using Clean Tankers increased year over year. Russian to global Clean Tanker cargo miles surged by almost 26% YoY to about 38 billion MT NM in January, according to trade statistics from VesselsValue.

Over the past year, Russian oil shipments to nations like China, India, and the UAE have surged dramatically, with commerce to India increasing by as much as 577%. Sanctions have altered trading patterns and led to the emergence of new routes. For instance, the number of Clean Tanker tonne miles between Russia and Brazil grew by almost 43% year over year, from 0.9 BN-MT NM to 1.3 BN-MT NM.

Clean Tanker’s profits, which are up by about 76% year over year, have benefited from the change in trade flows, which has resulted from both the rerouting of sanctioned cargoes and from EU and G7 countries now sourcing from further afield in order to secure energy sources and reduce dependence on Russian exports. However, this week saw a sharp decline in the extremely volatile MR market as US freight movement stalled and earnings fell from their peak of 55,857 USD per day earlier in February to 28,803 USD per day right now.

With levels up by c.49% YoY, the sale and purchase activity for MRs continues steadily. With the exception of earlier MRs, which have continued to gain momentum, values for Clean Tankers have generally corrected this year but have remained high. 20-year-old MR values have increased by c.6.24% to USD 16.17 million.

The MR2 Ibis Pacific (50,000 DWT, Jun 2007, STX Offshore) was a notable transaction. It was sold to unidentified buyers for USD 22.00 mil (SS/DD Passed), with a VV Value of USD 20.87 mil.

Aframaxes earning over 40K USD/Day

Due to stronger market fundamentals, Aframaxes has been making over 40,000 USD per day since July 2022. This has consequently impacted sales in this industry.

Aframax sales made up slightly under a quarter of total sales, or around 22%, in 2022, a record-breaking year for tanker sale and purchase transactions. The market for vintage tonnage continues to drive sales and buy activity levels for Aframaxes, which are up by over 33% YoY in the first two months of the year. This trend appears destined to continue in 2023. Aframaxes 15 years of age and over are included in this, making up 63% of sales in the first two months of this year.

Prices for 15-year-old Aframaxes reached 15-year highs in February and are currently at USD 38.79 mil, up roughly 142.75% year over year. Despite decreasing sales levels, demand for older vessels is driving up values because they can carry more modern cargo. But, subsequent transactions have lowered the bar for new Aframaxes. In an en bloc transaction, Delaware Star and Galveston Star (115,000 DWT, April 2023, DH Shipbuilding) were sold to GNMTC for USD 152 million (Resale), VV Value USD 154.73 million.


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Source: All About Shipping 


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