Spot rates for suezmax tankers are continuing to give back gains made since the start of Moscow’s war on Ukraine, touching a new post-invasion low as a quieter chartering market meets building vessel supply.
The Baltic Exchange’s measure of time-charter equivalent (TCE) earnings started June at $8,510 per day, a level not seen since the day Russian troops poured over the border on 24 February but still somewhat better than the loss-making rates that preceded the invasion.
Wednesday’s TCE rate marks a one-day plunge of 16.8%, as well as a 43% slump since the start of May. The figure is well off the peak of $109,500 per day seen in April.
The drop in the suezmax sector, which at first was among the tanker market’s chief beneficiaries of the Ukraine conflict’s blow to trading patterns, comes as tonnage has been building in West Africa and the Mediterranean.
Data from shipbroker Howe Robinson showed that the T6 route from the Black Sea to the Mediterranean on Wednesday stood at just under WorldScale 108, unchanged both from the day before and from a week earlier.
Wednesday’s rate equates to earnings of $19,700 per day for a non-eco tanker. That’s well below the year-to-date average just under $65,200 per day.
The story was similar for suezmaxes on the TD20 route from Nigeria to Rotterdam, where Howe Robinson’s estimate rate assessment has remained unchanged at WS 90, which equates to $6,870 per day for a non-eco tanker.
The London shipbroker saw little to smile about in the near term for suezmaxes ahead of a UK holiday and a shipping industry gathering in Greece.
“We see rates continue to come under downward pressure,” the firm said. “With Posidonia next week, it’s difficult to see where a shift in sentiment will come from.”
But looking further out, the suezmax tanker outlook looks more promising, amid hopes that it will benefit from further shifts after the EU banned seaborne crude imports from Russia.
“We expect spot rates to continue firming in the second half of 2022 as the tanker market recovery is well underway, and we enter the seasonally stronger winter market,” Magnys Fyhr, a shipping analyst for investment bank HC Wainwright, told clients on Wednesday after suezmax specialist Nordic American Tankers reported earnings.
He expects spot rates to average at $25,000 per day in the fourth quarter, compared to just $8,870 per day in the first three months of the year.
