Product tanker operator Ardmore Shipping has reportedly secured two period charters amid persistently low spot rates.
Brokers reported the 49,500-dwt Ardmore Explorer (built 2014) was recently chartered to Gunvor subsidiary Clearlake Shipping for 11 to 14 months at $14,250 per day.
The 50,000-dwt Ardmore Seawolf (built 2015) was said to be fixed to Weco Tankers for six to nine months at $13,500 per day.
Clarksons Research estimates the prevalent one-year rate for eco MRs at $14,250 per day.
Ardmore and Gunvor declined to comment on the fixtures. TradeWinds has approached Weco for comment.
Earlier in the first quarter, New York-listed Ardmore revealed in a company report that it had chartered out three MRs for 12 months to “de-risk near-term cash flow”.
The rate levels and ship names were not disclosed.
Market dynamics
With lockdown measures to control the spread of Covid-19 in many countries, the MR market has been mostly weak in recent months due to below-normal demand for refined products.
Investment bank Stifel assesses that spot earnings in the segment have averaged $5,688 per day so far this year, below operating expenses.
But young, fuel-efficient tankers have been popular in the time-charter market as charterers show appetite in securing quality tonnage at low rates, according to brokers.
“There is a steady flow of activities on the MRs,” Braemar ACM Shipbroking said in a note. “All things considered, eco tonnage remains the focus for charterers.”
Opec+ impact
Looking forward, many analysts expect the freight markets for crude and product tankers to remain bearish amid the slow pace of demand recovery during the coronavirus pandemic.
The Opec+ alliance announced just a small hike in crude production for April, which is expected to increase demand for crude tankers and push up bunker costs in the near term.
“The product tanker market will also get impacted indirectly as high oil prices will squeeze refinery margins and refinery runs during the weak demand spring season,” said Rajesh Verma, Drewry’s lead tanker analyst.
But some listed owners have a more bullish tone on market outlook.
Jens Christophersen, Oslo-listed Hafnia’s executive vice president on commercial matters, said continued depletion of oil product stocks amid an Opec+ cut would eventually lead to more shipping demand.
“Unlike crude tankers, who are directly impacted by crude production levels, product tankers are much closer to consumer markets,” Ardmore president Anthony Gurnee said.
“This time, we expect [end users’] demand pull will drive a recovery in product tanker rates ahead of crude tankers as the pandemic recovery gains momentum.”
