Concordia Maritime believes less attractive period charters are now on offer for MR tankers after a weaker May in the spot market.
The Swedish owner said earnings started last month at around $25,000 per day in a sliding market, but eventually ended in firmer territory at $35,000 per day.
The average for May was $23,100 per day, down 20% compared to the average over the last six months.
Chief executive Erik Lewenhaupt said this “dent” in the MR spot market has now affected time charter rates.
A one-year charter is priced at $27,000 per day, down from $30,000 at the end of April.
“There is still activity in the market for all types of tonnage, but the majority is for periods of less than 12 months,” the CEO added.
“Even so, a two-year MR charter was reported done at $30,000 per day but that may be with some delay in reporting,” Lewenhaupt said.
In the crude market, suezmax rates moved up from $45,000 to $60,000 per day over the month.
“For large crude tankers, the market is in a stand-off where charterers aren’t willing to pay rates at or above last-done and owners not ready to give away any previous gains,” Lewenhaupt added.
Concordia also tallies new orders of product tankers approaching 100 vessels so far this year, despite “very elevated” shipyard prices.
Scrapping levels staying low
But crude tanker orders remain muted, and scrapping continues on a very low level.
Annual totals of recycled tankers have fluctuated wildly, from 24 in 2020 to 115 in 2021, and back down to 61 vessels last year.
“We have so far this year only seen a handful of product tankers and no crude carriers going for recycling. It is reported that India plans a ban on merchant vessels above the age of 25, which potentially could speed up recycling for vintage ships,” the CEO said.
