Tanker rates on some routes climbed on Monday — including to China — but Covid-19 coronavirus fears continue to drag on the market.
Overall, the Baltic Dirty Tanker Index fell three points to 862, while time charter equivalent rates on TD3C Middle East Gulf to China route rose $700 to $21,151 and US Gulf to China TCE rates jumped $424 to $25,804.
Overall, VLCC TCEs went up $375 to $12,432, suezmaxes $293 to $23,320 and aframaxes $375 to $25,533.
Jefferies' analyst Randy Giveans said lower fuel prices were helping to drive the increases.
"Even if they're getting the same charter revenue in terms of lump sum price ... to move the barrels, the voyage expenses are less," he said.
"Outside of that, you're seeing a couple new cargoes and owners ... resisting continuing falling rates."
Deutsche Bank's Amit Mehrotra said in a note that VLCCs were showing "resiliency" with spot rates up 7% week over week to $26,600, though spirits were dampened by news of coronavirus spreading to new countries.
According to the World Health Organization, more than 77,000 people have the respiratory illness in China, resulting in 2,595 deaths, and more than 79,000 worldwide. Globally, 300 new cases were reported Monday.
"Nonetheless, VLCC tonnage lists have begun to shorten, a positive indicator for the near-term spot rate outlook," Mehrotra said.
He said suezmax spot rates fell 16% last week to $26,600 due to a lack of Libyan exports after a missile attack at the port of Tripoli sent tankers fleeing.
