Period charter activity in the product tanker market has picked up since mid-November as spot earnings recover on long-haul shipments.
With traders and oil majors showing more appetite in securing forward tonnage, market sources said at least three LR2s and six MRs had been fixed in the past 10 days.
The chartering spree, which comes after months of listless trading, has led to renewed optimism in some corners.
“Seeing a steady number of deals concluded is promising,” Braemar ACM Shipbroking said in a note.
“It is also good to see that some longer-term deals have been concluded, which gives hope that charterers are slowly finding more confidence in the future outlook of the market ... There are small positive signs.”
The period lengths in recent fixtures range from three months to one year, and charter rates appear to be bottoming out despite still being at low levels.
Several of those charters are attached with optional periods, in line with recent trends.
The ship was delivered after a special survey in a Turkish yard.
Also, brokers reported that Weco Tankers fixed the 49,800-dwt Torm Thor (built 2015) from Torm for three to six months at $13,500 per day.
Weco was said to have separately chartered the 50,000-dwt tanker BW Swift (built 2016) for 50 days, and the deal is attached with a first optional period of 40 days and a second of three months. The Hafnia ship was secured at a rate of $13,250 per day.
Moreover, Total reportedly fixed the 46,000-dwt High Freedom (built 2014) from Italy's d’Amico International Shipping at $14,750 per day on a one-year charter, which can be extended by another 12 months at $15,750 per day.
The French energy major also chartered the 49,990-dwt Zoilo (built 2015) from Tankerska Next Generation for three months at $11,500 per day. The deal can be extended by three months at $13,850 per day plus a second option for another six months at $14,800 per day.
Rate recovery in spot trade
The pickup in time charter activity has come as spot rates improve on recovering shipping demand in recent weeks.
Clarksons Platou Securities assessed spot LR2 earnings at $15,500 per day on Tuesday, up 11.7% over the past week. LR1 earnings were up 9.5% at $11,000 per day and MRs up 26.1% at $8,400 per day.
The LR market is supported by naphtha flows from the Middle East to Asia, while transatlantic shipments boost MR earnings, according to brokers.
While oil demand remains plagued by the Covid-19 pandemic, analysts believe the long-term prospects for product tankers remain optimistic due to increased tonne-mile demand and limited fleet growth.
“The refined products tanker market should improve as a result of increasing geographical arbitrage trading for refined products and slowing fleet growth,” investment bank Jefferies said in a note.
