VLCC owners were so hungry for fixtures that 17 tankers were thrown at a single cargo in the Middle East as rates slumped to painful lows, brokers said on Thursday.
The pile-on came as the Baltic Exchange’s estimate of -$8,330 per day in time charter-equivalent (TCE) earnings represented an “all-time low”, Cleaves Securities chief executive Joakim Hannisdahl said on Twitter.
“The sheer volume of excess tonnage supply was very evident today when an attractive cargo received 17 offers in the MEG [Middle East Gulf],” UK-based shipbroker Howe Robinson said. “Not surprisingly, rates have little chance than to remain under pressure.”
The pile-on saw Pantheon Tankers Management’s 299,000-dwt Sea Pearl (built 2017) score a loss-making fixture as it came out of dry dock in China.
Refiner S-Oil booked the vessel to carry a cargo from the Middle East to South Korea at Worldscale 26, according to Tankers International.
The VLCC pool operator said that amounted to an actual time-charter equivalent rate of -$5,280 per day, but if it were on a more comparable round-voyage basis, it would equate to a painful -$10,300 per day.
Tankers International compared that with a last-done fixture on Tuesday at WS 35.5.
Howe Robinson Partners reported that VLCC rates plunged to WS 33.5 on the benchmark TD3C route from the Middle East to China, down from WS 35 on Thursday and from WS 35.5 a week earlier.
Eco tonnage premium
That amounted to earnings of just $448 per day for eco tonnage, a decline from $2,964 per day on Wednesday.
The day’s spot rate decline translated to deeper losses for non-eco VLCCs, which were assessed on Thursday at -$8,752 per day, down from -$6,022 a day earlier.
There is “little near-term optimism to be found”, Hannisdahl said on Twitter.
Indian Oil fixed Eastern Mediterranean Maritime’s 300,000-dwt Agios Fanourios I (built 2016) to load in the Middle East and deliver on India’s west coast.
The state oil company is paying WS 47 for the voyage, which represents a slump from the last-done fixture at WS 63.1 on 24 January.
The rate equates to just $160 per day in actual earnings for the scrubber-fitted vessel, although Tankers International said it equates to round-trip TCE earnings of $3,177 per day.
Futures point to some improvement ahead for the VLCC market, with freight forward assessments returning to positive earnings in April, according to Howe Robinson data.
