Yet another week of low activity was recorded in the VLCC market, ex MEG, as the ‘free-volumes’ struggled to find their way into the market
Most Chinese cargoes were shipped on domestic hulls, meaning there was little left for the long list of tonnage in position looking for employment, Fearnleys reported.
Although West African activity picked up during the past week, the benchmark route WAfrica/China was untested until Wednesday when WS44.5 (2018 scale) was reported, which equals about $10,500 per day on the basis of a round voyage.
Some normality has returned to the Suezmax market with natural dates more in line with the norm, compared to the lag seen recently. It is evident from the current West African list that there has been quite a significant drop in tonnage availability from a week ago.
West African action was light but there was an increase in Med and Black Sea fixing, which contributed to a more balanced market. The Black Sea has bucked the overall trend and has traded up slightly reaching WS65 for TD6.
Looking forward into next week, expectations are for a steady market. West Africa is going to need a clear out a backlog of early ships before owners can find enough leverage to build sentiment.
First decade February Aframax fixing is coming to an end and thus far, reality is far from owners expectations. This is mainly due to maintenance at Primorsk. Another factor is that a lot of cargoes have been covered on oil companies own tonnage.
Going forward, we expect colder weather, and, as soon as Primorsk’s maintenance programme comes to an end, rates could turn in owners’ favour, Fearnleys said.
In the Med and Black Sea last week, Aframax owners tried to push rates up by holding back tonnage. They partly succeeded, as the rates ticked up a couple of points.
Unfortunately, this was quickly ruined by Suezmax owners willing to fix 80,000 tonnes at WS110.
However, we are now back to Aframaxes loading these cargoes, as the market has softened, but as long as the Suezmax market remains weak, we will have no way of pushing the rates above WS110 before the Suezmaxes are suddenly back in play, Fearnleys concluded.
Elsewhere, Angolan state oil firm Sonangol has issued its first public tender to buy refined products to widen its import base, market sources told Reuters.
For years, OPEC member Angola has largely relied on commodities trader Trafigura for fuel imports. Trafigura still supplies gasoil but major competitor Vitol recently supplied the country with gasoline.
One sources said the tender would close on 31st January and it was calling for 1.2 mill tonnes of gasoline, 2.1 mill tonne of gasoil and 480,000 tonnes of marine fuel.
“The real market liberalization is still to come as Sonangol remains the monopoly importer,” one of the sources said.
Remaining in the charter market, South Korea’s Polaris Shipping has placed two newbuilding Aframaxes in Navig8’s Alpha8 Pool.
The ’Polar Ace’ and ‘Polar Bright’ are being built Daehan Shipbuilding and are scheduled for delivery in February and August 2018, respectively.
Including the two newbuildings, Navig8’s Alpha8 Pool currently comprises 18 tankers.
Brokers have since reported that the ‘Polar Ace’ was fixed to Navig8 for 12, option 12, months at $17,000 per day.
Elsewhere, on 1st February, Hyundai Merchant Marine (HMM) signed a long-term crude oil shipping contract with South Korean refiner GS Caltex.
Under the terms of the deal, HMM will transport 19 mill tonnes of crude oil from the Middle East to South Korea for five years from 1st July, 2019, to 31st August, 2024.
HMM said it planned to deploy two VLCCs ordered last September.
In December last year, a 10-year contract was signed by GS Caltex with Hyundai Glovis which led to the ordering of a VLCC to ship oil from the MEG to South Korea.
A couple of Suezmaxes were reported fixed. NAT’s ‘Nordic Castor’ was said to have been taken by Cepsa for 12 months at $17,000 per day, while ST Shipping was believed to have fixed the 2016-built ‘Faithful Warrior’ for 12 months at a rather high $25,000 per day.
Koch was also said to have concluded the charter of the 2015-built ‘Pyxis Epsilon’ for four to five months for a high $16,150 per day.
In the newbuilding sector, Cosco Shipping Energy has ordered another two VLCCs from Dalian Cosco KHI Ship Engineering for a reported $151.96 mill.
The two 308,000 dwt tankers are scheduled for delivery in August 2020 and January 2021, respectively and will be 70% funded by bank loans, the group said in a stock market announcement.
This follows a tranche of orders for the Chinese conglomerate announced in the past couple of months.
Kyoei Tanker was thought to have ordered a VLCC for around $82.5 mill from Namura on the back of a charter to NYK.
Indonesian shipping company Soechi Lines has reportedly earmarked between $30 mill and $50 mill to acquire a tanker this year. No other details were available.
Bergen-based chemical tanker owner Utkilen was said to have ordered two 9,900 dwt chemical tankers at AVIC Dingheng for around $25 mill each. They are due for delivery in 2019 and 2020.
Ocean Tankers of Singapore has ordered six, option four, 23,000 dwt tankers at Fujian Mawei for 2020 delivery onward.
The last in a series of 13 IMOIIMAX chemical and product tankers was named ‘Stena Impero’ this week in Guangzhou. She is the last of 13 sisterships ordered by Stena Bulk at GSI (Guangzhou Shipbuilding International) in 2012, representing an investment of SEK4 bill.
After her delivery on 7th February, she will sail on her maiden voyage with a cargo of vegetable oils from Asia to Europe.
“It was exactly three years ago that we took delivery of our first vessel in the IMOIIMAX series and the vessels have performed beyond our expectations. Both the technical and the commercial concepts have proved to be very successful and have set a new standard for cargo efficiency and bunker consumption.”
“With the delivery of the ‘Stena Impero’, the IMOIIMAX fleet is now complete, in line with the order, and is a significant and competitive addition to our high-quality fleet. At the same time, it is an important step forward and a development of our existing sophisticated trading system,” said Erik Hånell, President and CEO of Stena Bulk.
In the S&P sector, Avin was believed to have purchased the 2004-built Suezmax ‘Marika’ for $16.9 mill, while undisclosed interests were said to have bought the 2004-built MR ‘Seaways Alcmar’ for $10.65 mill and Indian-based Seven Islands purchased the 2000-built MR ‘Ashland’ for an undisclosed sum.
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Source: Fearnley Shipping
