DHT Holdings has reportedly extended the period charter for one of its scrubber-fitted VLCCs amid persistently weak spot rates.
Brokers reported Trafigura agreed to fix the 320,000-dwt DHT Peony (built 2011) for another six to 11 months at an average rate of $21,190 per day.
The deal is thought to be profitable for the New York-listed owner, as DHT enjoys a low cash break-even level of $17,900 per day after deleveraging efforts in recent quarters.
But brokers said such a rate level reflects a bearish market mood in the near term, with average spot earnings continuing to languish below operating expenses.
“The crude period market has remained lacklustre,” Braemar ACM Shipbroking said in a note. “This situation is certainly signalling the problems in the immediate months.”
DHT had said seven of its 16 VLCCs on time charters were due to be redelivered between 9 February and 31 March.
TradeWinds reported last September that Trafigura chartered the DHT Peony for up to six months at $35,000 per day.
Busy LR2 market
Among other recent fixtures, a number of LR2 deals have been reported with charter rates showing signs of bottoming out.
The increased period activity has come amid rising spot earnings in the segment recently, in part driven by healthy cargo movements in East Asia.
“The overall uptick in Eastern spot rates on the LRs has prompted some much needed confidence … with more charterers now willing to discuss taking tonnage on time charter [coverage],” Braemar said.
It added that eco vessels remain “the category of choice” but that it was “encouraging” to see non-eco tonnage also fixed recently.
Trafigura is said to have taken the 109,000-dwt LR2 Seletar Spirit (built 2010) from Teekay Tankers on a six-month charter at $15,000 per day, and the deal can be extended by six months at $16,000 per day and another six at $17,000.
Earlier this month, Oceangold Tankers’ 109,000-dwt Ocean Avra (built 2008) was reportedly chartered to Aramco Trading for $13,500 per day on a six-month charter, attached with a six-month option at $16,000 per day.
Latsco Shipping separately fixed the 115,000-dwt Captain Paris (built 2014) to Vitol for 12 months at $18,000 per day.
Meanwhile, brokers said Total took the 110,000-dwt BW Larissa (built 2019) from Hafnia for a year at $19,000 per day.
“It’s more of a decision of charterers opting in this type of size,” said Alibra Shipping director director Giuseppe Rosano, adding that appetite for aframax charters has also increased lately.
But there are doubts over whether owners can start to hike rates with still weak oil demand.
“Some [owners are] thinking this may be the beginning of the end of the woeful rates that Covid has brought,” Braemar said.
“With several countries still locked down and vaccine roll-outs only getting started on the most part, this may be a little premature.”
Hafnia confirmed the BW Larissa was chartered to Total but declined to reveal commercial details. Trafigura and Vitol declined to comment. TradeWinds has approached DHT, Teekay, Oceangold and Latsco for comment.
