Friday, July 8, 2016

Markets - VLCC soft sentiment continues

 Gulf Sheba VLCC arrested in Rotterdam


After the peak last week, the VLCC market saw rates drop by a point each day, as the softer sentiment continued. 
 
Charterers continued to drip feed the market, picking newbuilds and vessels coming out of drydock for their most recent requirements. With these vessels cleared out of the way, the list still looks ample for the current cargo flow, Fearnleys reported.

However, with more delays in China and a Typhoon due to hit South China next week, things might turn, but for now the summer months are really taking a toll on the market for the time being.

West African Suezmaxes saw activity easing off at the beginning of last week, with only a few ships being fixed.

At time of writing (Wednesday), we experienced steady cargo inquiry in the last couple of days for the 3rd decade out of WAFR, resulting in more tonnage getting absorbed without rates really going anywhere, due to the previous quiet period and tonnage build-up, Fearnleys said.

In the Med and Black Sea, last week proved to be busy with a combination of steady fixing and replacement jobs, which has pushed rates up in this area.

North Sea and Baltic both experienced another downward correction as the end/early rush came to a conclusion. Both markets seem to have bottomed out, and should be moving sideways at current levels for the week to come.

Med and Black Sea also saw a steady downward correction with rates bottoming at WS92.5. For the remainder of the week, it is likely that this rate will be repeated.

However, we expect that the market will firm up again, due to the number of cargoes scheduled to come out of CPC from the 20th of this month, the question is - when and who will start the race, Fearnleys queried.

Among the fixtures reported by brokers recently were the 2012-built Suezmax sisters ‘Densa Whale’ and ‘Densa Orca’ thought taken by Stena Bulk for 12 months at $23,000 per day each.

Hindustan Petroleum was said to have fixed the 2003-built LR1 ‘Jag Padma’ for 12 months at $17,150 per day, while ST Shipping was thought to have fixed the 2007-built LR1 ‘United Ambassador’ for six months at $19,000 per day and Shell was reported to have taken the 2016-built Aframax ‘Lyric Mongolia’ for two to six months at $18,500 per day.

In the MR sector, Frontline was believed to have taken the 2012-built ‘Miss Benedetta’ for six months at $14,750 per day, while STI was said to have fixed the 2013-built ‘Zefyros’ for 12 months, option 12 months at $14,500 per day for the first period.

Reliance was thought to have fixed the 2004-built Handysize ‘Hafnia Adamello’ for 12 months at $15,650 per day, while STI was said to have taken the 2011-built Handy ‘Atria’ for six months for $13,500 per day. 
In the S&P market, Winson was believed to have purchased the 2000-built VLCC ‘BW Ulan’ at an unknown level. New Shipping was said to have spent $26 mill on the 2008-built Aframax ‘TH Sonata’, while the 2011-built Aframax ‘Nissos Kythnos’ was said to be on subjects to unknown buyers at $39 mill. 

The 1995-built MR ‘Sriracha Trader’ was believed committed to Middle East interests for around $3-4 mill.

In the newbuilding sector, ‘K’ Line has ordered three VLCCs and two Aframaxes from domestic shipyards.

The company is to build two VLCCs at Kawasaki Heavy Industries with deliveries scheduled for 2017 and 2018, while Namura Shipbuilding is to construct the third VLCC and two Aframaxes, which are due for delivery in 2018 and 2019.

K Line said that the orders form part of its fleet upgrading plan and that the vessels have been designed to comply with forthcoming regulations, including the Ballast Water Convention.

Elsewhere, Stream Tankers has ordered two, plus two optional 19,900 dwt stainless steel IMO II chemical tankers at Fukuoka for 2018-2019 deliveries. No price was revealed. 

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