Recent period fixtures of product tankers with a more complex pricing structure suggest earnings of MR vessels are bottoming out, according to market participants.
Latsco Shipping fixed the 50,000-dwt Hellas Aphrodite (built 2016) to ST Shipping & Transport for one year, with the ship due for delivery in East Asia, brokers reported.
The Glencore subsidiary is said to be paying $11,000 per day for the first three months and $14,500 per day for the remaining period.
Also, Pyxis Tankers reportedly chartered the 50,300-dwt Pyxis Epsilon (built 2013) to Clearlake Shipping, a Gunvor outfit, for eight months. The ship is fixed to be delivered in the Black Sea.
The rate is $13,500 per day for the first two months, $15,000 per day between the third and the fifth month, and $16,500 between the sixth and the eighth.
Glencore declined to comment. Pyxis, Gunvor and Latsco have not responded to emails seeking comments.
According to Braemar ACM Shipbroking, the one-year rate for an eco MR is $14,750 per day, with vessels delivered in the West-of-Suez trade fetching higher rates than in the East.
The more complex structure in recent deals underscored that charterers were expecting a gradual recovery in MR rates
“When the spot rate is low, charterers who are willing to take long position ask and obtain this kind of deal in order not to lose too much during the first few months,” said a broker, adding that the payment curve often takes forward freight agreement values into consideration.
“I guess it's a question of cash flow, and of being able to push things through the board of directors and management.”
A shipowner said charterers often make such deals for accounting purposes.
“For owners, it makes little difference,” he said.
While the rates in the prompt months are low, “eventually it will average out” for shipowners, the source added.
Clarksons Platou Securities assessed global average spot MR earnings at $15,300 per day as of Wednesday, up 58.6% over the past month.
Analysts believe the recent strength is related to healthy Atlantic trade and rising Chinese exports but warn low oil consumption could curb market upside in the coming quarters. In any case, earnings are still expected to pick up during winter due to seasonal demand.
