A rise in suezmax tanker rates to the highest level in five months has led owners of larger VLCCs to look over the fence.
The Baltic Exchange’s assessment of time charter equivalent rates for suezmaxes has surged to nearly $59,900 per day.
That is a one-day climb of 12.1% and a 534% jump since TCE rates hit their lowest point of the year slightly more than a month ago.
And it is the highest level for the market since 18 May, when rates were still bounding downward from a peak of around $132,000 in November.
Howe Robinson, the UK shipbroking house, blamed Tuesday’s gains on continued activity in the Atlantic market, which has tightened tonnage for lifting cargoes in the first half of November and pushed rates higher. The Middle East and Mediterranean markets, by contrast, are quiet.
The firm estimated average suezmax tanker earnings on Tuesday at $58,800 per day, up from $54,400 a day earlier, and $51,200 per day a week ago.
“However, at current levels, we have begun to see VLCCs looking at suezmax stems, which may start to put a ceiling on rates,” Howe Robinson said in its daily spot market report.
Unlike their smaller cousins, VLCCs have struggled to pull out of their summer doldrums.
The Baltic Exchange’s assessment of TCE rates for the sector fell to $11,600 on Tuesday, a one-day slump of 2.8% and a drop of 45.6% since rates peaked in the second short-lived rebound in recent weeks.
The latest fixtures showed weakness in both the Atlantic and the Middle East.
ExxonMobil grabbed the Zodiac Maritime-operated, 297,000-dwt Blue Nova (built 2011) for a voyage from West Africa to the UK or Continental Europe at the equivalent of $32,600 per day, according to Tankers International.
On a round-voyage basis that allows comparison, the charter is worth $32,600 per day for the scrubber-fitted ship.
A similar voyage fixed on 12 October fetched a round-voyage rate of nearly $73,400, data from Tankers International shows.
