Denmark’s Torm has reportedly fixed out two of its LR2 product tankers as charterers return to the period market following weeks of quiet trading.
The 115,000-dwt Torm Hermia and Torm Herdis (both built 2018) were chartered to Aramco Trading for 12 months at $21,500 per day, shipbrokers said.
Industry databases show the two vessels, constructed by CSSC Offshore & Marine Engineering, were either installed with scrubbers or scheduled to undergo the retrofit in the coming quarters.
TradeWinds has approached Aramco for comment. Nasdaq-listed Torm declined to comment on the reports, as the company is in a quiet period before its quarterly earnings report.
The reported rate is roughly in line with the current market level.
Clarksons Research assessed the one-year rate for an eco LR2 at $21,500 per day as of last Friday, down from $44,000 in early May. But the period charter rate is still much higher than spot earnings.
“There is a feel that the clean time charter market is picking up somewhat,” Braemar ACM Shipbroking said in a note.
“Charterers now seem more willing to look for tonnage with some longer periods also being discussed,” said the broking house.
Braemar ACM added that sentiment is “picking up nicely”.
LR2 spot earnings have been close to their lowest this year in recent weeks, dragged down by weak vessel demand in the Middle East Gulf, brokers said.
The Baltic Exchange estimated earnings on the benchmark Gulf-to-Japan route at about $6,640 per day on Monday, nearly halved from $13,200 on 30 June.
But most analysts believe the market conditions will slowly improve in the coming quarters, with a small orderbook, a gradual recovery of oil demand and new refineries coming online.
“With potential for a significant proportion of the oil market surplus to be eroded in the second half of 2020, a return to more positive demand trends is provisionally expected during 2021,” Clarksons Research said in a report.
“However, with much depending on the shape and strength of the global economic recovery, significant uncertainty remains.”
Fearnley Securities has predicted spot LR2 earnings to average $20,000 per day in the third quarter, $26,000 in the fourth, and $25,000 for the whole of 2021.
