The Baltic Dirty Tanker Index leapt to a 12-week high on Wednesday as major crude carrier segments posted significant gains for the day.
The gains came on the back of a surge in chartering activity for VLCCs in the multiple markets and suezmaxes in the Atlantic, while aframax rates built on their strength in the Mediterranean and on the US Gulf Coast.
The index, a measure of spot market strength across the aframax, suezmax and VLCC space, surged 4.8% on Wednesday alone. That was the highest level since 19 July and represents a 33.9% leap since the indicator began rising from a year low on 8 September.
In the VLCC sector, the Baltic Exchange recorded a one-day jump of nearly 178% as the assessment of time charter equivalent rates rose to $8,457 per day, meaning it has regained all its losses since rebounding to the same level in late September and then crashing.
But the Baltic Exchange indicator is typically lower than other market measures. Shipbroker Howe Robinson put average VLCC rates at $31,200 per day for tonnage without an eco engine or scrubber.
“The uptick is attributed to a surge in charter activity yesterday, with numerous bookings from the Middle East Gulf to China for late October,” Clarksons Securities analysts led by Frode Morkedal said on Wednesday.
“Furthermore, multiple VLCCs were reserved from the US Gulf, West Africa and Brazil bound for the Far East, which are long-distance voyages that tie up ships for extended periods of time.”
Among Wednesday’s fixtures, Chinese chartering giant Unipec grabbed Frontline’s 300,000-dwt Front Tweed (built 2022) for the equivalent of $41,500 per day, according to pool operator Tankers International.
That amounts to a round-voyage rate of $43,000 per day for the modern, scrubber-fitted ship on the voyage from West Africa to China.
That is not only well above the last-done rate of $35,100 per day for a vessel with a scrubber fixed for the same route on 21 September, it also brings the rate above the Front Tweed’s estimated breakeven level of $37,700 per day, according to Tankers International data.
Middle East fixtures painted a similarly bullish picture. The 319,200-dwt VL Bright (built 2022) scored a $45,000-per-day charter from Nghi Son Refinery & Petrochemical for a voyage to its refinery in Vietnam.
On a round-voyage basis, which allows comparison with other fixtures, the Trafigura-operated, scrubber-fitted ship fetched a rate of almost $43,000 per day, which is above breakeven levels and the last-done deal of just $26,800 per day on the route set a week earlier.
Also pushing the Baltic Dirty Tanker Index higher is the suezmax sector, where the exchange assessed rates at $16,200 per day.
That is a one-day rebound of 15.8% and the highest level for the sector since 1 August, although it remains well below the peak of more than $130,000 per day set in November.
Howe Robinson said a number of suezmaxes were put on subjects in the Atlantic market on Wednesday.
“Cargoes remain outstanding and with [aframaxes] firming in the US Gulf and Mediterranean, rates are poised to firm and sentiment is bullish heading into the back end of the week,” it said of the suezmax market.
Aframaxes’ Baltic spot assessment leapt 14.2% in the day, with earnings of more than $24,700 per day marking the highest level since 27 July.
