The MR period charter market was a frenzy of activity in November, with several shipowners reported to be extending front cover for tonnage amid firm sentiment.
As charter rates for product tankers climbed to their highest in about four years, industry sources reported that at least 10 period deals were fixed, with terms ranging between six and 24 months.
Among the most active was Navios Maritime Acquisition, which secured two 24-month charters. One was for the 50,000-dwt Nave Equator (built 2009) with Chevron at $16,250 per day, and the other for the similarly sized Nave Luminosity (built 2014) with Stena Bulk at $17,500 per day.
Its 50,000-dwt Nave Aquila (built 2012) was also chartered to Stena Bulk for 12 months at $16,000 per day.
Valentios Valentis-linked Pyxis firms chartered the 50,300-dwt Pyxis Epsilon (built 2015) and 50,100-dwt Pyxis Lamda (built 2017) to Trafigura for six months at $19,500 per day, with options to extend the deals by another six months at $20,500 per day.
'Bird in hand'
“Some owners have decided ‘a bird in hand is better than two in the bush’ and accepted these fantastic rates [rather] than gamble [on] what will be,” said Giuseppe Rosano, director at shipbroker Alibra Shipping.
“Remember it is not the timing you actually fix which determines if it was a good idea or not, but the entire period which counts.”
On the other hand, some tanker players engaged in pool operations are chartering in more tonnage, apparently in anticipation of further hikes in spot earnings.
Maersk Tankers took two vessels from the Shell-Sinokor Project Silver series — the 49,700-dwt Silver Emily and Silver Hannah (both built 2014) — for 24 months at $19,500 per day. The charters can be extended by a further year.
Norden fixed the 47,200-dwt Alpine Monique (built 2010) from ST Shipping for 18 months at $16,500 per day. It also chartered the 50,000-dwt scrubber-fitted Eco Marina Del Rey (built 2019) for two years at $19,500 per day.
With slowing newbuilding deliveries and the IMO 2020 expected to trigger more demand for distillates, many industry players expect product tanker earnings to remain high throughout next year.
According to Fearnley Securities, spot MR earnings will average $18,785 per day in the first quarter of 2020, $15,470 per day in the second quarter, $22,100 per day in the third quarter, and $33,150 per day in the fourth quarter.
“Currently [in] the time charter market ‘next done’ should be higher than ‘last done’, as the owners have the upper hand,” according to a Braemar ACM note. But the shipbroker also warned: “Any market call should be taken with a pinch of salt.”
“The owners face a tough decision: Sell or time charter out but then miss out on the lucrative return from spot markets. Similarly…charterers will appreciate the potential upfront profit but be concerned about the length of the firmer spot markets.”
| Ship | Capacity in dwt | Owner/Operator | Charterer | Length in months | Daily rate |
| Alpine Monique | 47,200 | ST Shipping | Norden | 18 | $16,500 |
| Eco Marina Del Rey* | 50,000 | Cargill | Norden | 24 | $19,500 |
| Ice Point~ | 51,000 | PB Tankers | Trafigura | 6 | $18,500 |
| Nave Aquila | 50,000 | Navios Maritime Acquisition | Stena | 12 | $16,000 |
| Nave Equator | 50,000 | Navios Maritime Acquisition | Chevron | 24 | $16,250 |
| Nave Luminosity | 50,000 | Navios Maritime Acquisition | Stena | 24 | $17,500 |
| Pyxis Epsilon | 50,300 | Pyxis Tankers | Trafigura | 6 + 6 | $19,500-$20,500 |
| Pyxis Lamda | 50,100 | Pyxis Maritime | Trafigura | 6 + 6 | $19,500-$20,500 |
| Silver Emily | 49,700 | Sinokor | Maersk Tankers | 24 + 12 | $19,500 |
| Silver Hannah | 49,700 | Sinokor | Maersk Tankers | 24 + 12 | $19,500 |
*scrubber-fitted; ~ice-class
Sources: VesselsValue, Clarksons and other brokers
