Shipping Corp of India has chartered out one of its LR2 tankers for up to a year at a rate level not seen in a long time, underscoring the recovery in product tanker markets.
The 104,000-dwt Swarna Jayanti (built 2010) has reportedly been fixed by Koch Logistics for six months with an option for six more months.
The rate for the firm period is $17,250 per day, and it is $19,250 per day to $19,500 per day for the optional period.
The ship is one of five LR2s that the state-run company ordered from Hyundai Heavy Industries in 2007 for at least $70m each.
Those ships, delivered in 2010 and 2011, have primarily been employed on time charters to international players, where the rates for many months were stable around $16,000 per day.
The Swarna Jayanti’s latest period fixture has come as spot earnings of product tankers reach multi-year highs, renewing mid- and long-term prospects for the sector after quarters of rate weakness.
Rise in one-year rates
Based on Alibra assessments, the one-year rate for a LR2 tanker was $17,500 per day as of early December — up 7.7% from the level seen a month ago.
Among other LR2 fixtures, Vitol has secured the 112,000-dwt Zenovia Lady (built 2009) from Colonial Shipping, while Eletson Corp has fixed out its 106,000-dwt Megalonissos (built 2004) for a year to Castleton Commodities International. However, rate information has not been disclosed.
The strength of product tankers has partly resulted from buoyant cargo trades and port congestion, according to analysts. Also, Stifel says a strong crude tanker market has drawn as many as 17 LR2 ships to trade as aframaxes last month, which has undercut vessel supply.
Max Tingyao Lin contributed to this article
