Brokers are noting a shift in the period tanker market as clean carrier rates shoot up on Red Sea disruption.
Charterers are seeking to hedge their freight costs over longer terms, with spot levels expected to remain elevated for at least another year.
Greece’s Metrostar Management is said to have fixed out the 115,000-dwt Metro Aegean — Hull No 525 at Hyundai Vietnam — to Glencore’s ST Shipping for five years.
The scrubber-fitted LR2 will earn $35,500 per day from delivery in May 2024, which equates to $65m over the full term.
The ship is the first of four that Metrostar has on order in Vietnam. The company has been contacted for comment.
Shipbroker BRS Group pegs eco LR2s with scrubbers fitted at $51,000 per day for a one-year charter, $43,500 for three years and $36,000 for five years.
Spot rates for eco LR2s now stand at $83,200 per day on average, according to Clarksons Securities.
ST Shipping has mainly been active of late with medium-term deals and very quiet in the long-term arena.
A change of view
But Giuseppe Rosano, founder of UK shipbroker Alibra Shipping, told TradeWinds this has changed recently.
“Management has had a change of view and we have seen them fixing off-market long-term deals,” he said.
ST has also ended some older long-term charters from Greek owners and now sees an opportunity to renew with fresh ships and owners, he added.
Rosano is surprised to see the company renewing for such periods at this price level, though.
However, the market consensus is for spot rates to continue strong for up to 18 months.
He explained: “Even though the market can eventually turn sour any time, charterers calculate that at these earnings for one or one-and-a-half years, you have written down a lot of the charter.”
He argues that term rates have risen overall.
Term deals on the rise
Alberto Ayuso, an analyst at Spain's Medco Shipbrokers, told TradeWinds the number of 36-month to 60-month contracts has increased significantly.
“I think it is an effect of the combination of skyrocketing newbuilding prices, high spot rates and also the perspective that rates will hold,” he said.
“So the only way to secure [a] fleet for charterers is to lengthen the periods.”
He also believes term rates have risen slightly, but only to levels seen a year ago, following a slight decrease last summer.
ST Shipping has also reportedly booked two MR2 newbuildings for three years.
The 49,400-dwt CL Toni Morrison, due in May from New Times Shipbuilding in China, has been fixed at $27,000 per day from China Development Bank Financial Leasing.
A sister coming in September has been taken on the same terms.
But Vitol has also been linked to the two ships for a year at $33,000 per day.
In addition, brokers reported Scorpio Tankers’ 50,000-dwt MR2 STI Duchessa (built 2014) fixed for three years to Reliance Industries in India at $25,000 per day. But a source close to the New York-listed shipowner said the report was incorrect.
Spot eco MR rates are $39,400.
BRS assesses a one-year fix at $34,000, with three years quoted at $27,500 and five-year deals at $24,000.
