Trading giant Trafigura has been taking advantage of weak freight rates to fix aframax tankers on short period charters at highly favourable terms, market sources said.
Shipbrokers and owners said the deals allow Trafigura to take advantage of current cheap rates while retaining options to extend them should the winter market become more volatile.
The trader is reported to have secured AET’s 107,100-dwt Eagle Torrance (built 2007) on a 30-day charter with three 30-day extension options.
The initial rate is between $11,000 and $12,000 per day, and it will pay $2,000 per day extra for each extension.
Brokers reported that Latsco Shipping’s 105,700-dwt Fos Hamilton (built 2013) was fixed for similar rates, but the shipowner said the information was incorrect.
Zodiac Maritime’s 114,400-dwt Cobalt Sun (built 2009) was understood to have been fixed for 30 to 100 days in a similarly structured deal at higher rates.
Separately, Trafigura was said to have chartered the 109,600-dwt Maersk Petrel (built 2007) from Maersk Tankers for 30 to 90 days at $13,000 per day.
Trafigura and AET both declined to talk about the deals. Maersk Tankers did not respond to a request for comment.
The sources said some of the vessels are believed to be used for storage or ship-to-ship transfers in northern Europe as the charterer seeks operational flexibility in anticipation of oil oversupply.
With a second wave of Covid-19 hitting European economies, consultancy Rystad Energy has anticipated the lockdowns in France and Germany could wipe out up to 1.7m barrels per day of oil demand in November.
‘Cheap deals’
Shipbrokers and owners suggested the charterer is looking at similar deals.
“They are looking for more,” one of them said. “Those are really cheap.”
Another said: “Trafigura has been the most aggressive in taking time charter options ... These deals are phenomenal for a charterer.”
Trafigura’s terms are deemed attractive for some shipowners as spot aframax earnings have often been below operating expenses in recent weeks.
Howe Robinson Partners estimated average aframax earnings in the spot trade to be at $2,013 per day on Monday, compared with $4,033 per day at the beginning of the fourth quarter.
Despite a seasonal pick-up in demand, few expect a significant improvement in freight markets this winter as a result of Opec+ supply cuts and weak oil demand during the pandemic.
“The size of the tonnage overhang suggests that ... we do [not] expect much support to be given to tanker rates over the coming months,” Alphatanker said in a recent note.
Analysts expect the market to only see a sustainable recovery when tanker owners start to scrap old vessels or begin slow steaming — but none of those have occurred on a large scale.
“Sooner or later, things will have to change,” said Giuseppe Rosano, a shipping director at brokerage Alibra. “Nobody knows where the market is going to be.”
