Tanker Values Soar At 13 Year High

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Credit: Vessels Value
  • Values for five year old VLCCs (Very Large Crude Carriers) are currently at the highest levels since 2009.
  • Overall, Tanker sales have risen this year by c.12% with 1,026 transactions reported so far in 2022.
  • Uptick in values comes as the Tanker spot market continues to gain ground.

For example, 320,000 DWT, 5YO are currently valued at USD 95.74 mil, up 33.12% from the start of the year from USD 71.92 mil in January.

Soaring High

Uptick in values comes as the Tanker spot market continues to gain ground, with VLCCs currently earning 79,833 USD/Day on the TD3C-TCE Middle East Gulf to China route. This has been the highest level since April 2020, up by almost 78,000 USD/Day from the same period last year. 

Such levels are due to changes in trade flow patterns and additional tonne mile demand (stemming from impending sanctions on Russian oil coming into force next month), Additionally, these surges are due to demand from Europe looking to secure energy, as winter in the Northern hemisphere approaches.

Capesize Values Tumble

Values for Bulkers have fallen across all size and age ranges since the start of the year. In the Capesize sector, values for five year old vessels have fallen by c.7% since January from USD 45.86 mil to USD 42.6 mil. Despite this fall, values still remain above average levels, indicating that values could continue to correct lower if earnings remain under pressure. The drop in values corresponds to an overall downward trend in earnings, as declining iron ore demand from China has hampered the current earnings potential for this sector.

Capesize spot earnings continue to be outperformed by the smaller sizes with the Baltic Exchange 54-TCA currently at 12,807 USD/Day down c.59% year on year. Capesize sales for November are up considerably from last year, where just one sale was reported in November 2021.

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Source: SweetcruderReports

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