A chartering spree by Trafigura has reportedly supported the period rates for aframax tankers amid a stronger market mood.
Brokers reported the trading giant last week fixed the 105,000-dwt Patmos Warrior (built 2007) for 12 months at $28,000 per day and the 107,000-dwt Iconic Artemis (built 2009) for two years at $25,000 per day.
This was higher than Braemar ACM’s assessments of a one-year prevailing rate of $24,000 per day and two-year rate at $21,500 per day.
“November fared much better than feared,” the brokerage said in a note.
“The sellers’ [owners’] expectations are high whereas charterers require prompt delivery in order to benefit from the strong spot market.”
Market participants generally expect slowing newbuilding deliveries, long-haul shipping demand from the Atlantic basin and the IMO 2020 rule changes to support tanker earnings in the coming quarters.
In a recent Bloomberg survey of analysts, the average estimates of aframax earnings amounted to $27,500 per day in 2020 and $24,700 per day in 2021.
Separately, in the LR2 segment Trafigura chartered the 115,000-dwt Kleon (built 2016) for two years at $25,000 per day and the 112,000-dwt Zenovia Lady (built 2009) for 24 to 26 months at $26,000 per day. The Zenovia Lady is believed to be installed with scrubber technology.
The company also fixed the 80,000-dwt Gem No 3 (built 2017) for 18 months at $20,350 per day.
While still reflecting rising rates, the earnings locked in by the ships were slightly underwhelming when compared with the bullish outlook for product tankers.
Average estimates of LR2 earnings reached $28,000 per day in 2020 and $25,000 per day in 2021, according to the Bloomberg survey.
Average LR1 estimates were $23,200 per day next year and $20,250 per day in 2021.
However, taking a cue from the buoyant MR time charter market, a London-based broker pointed out that LR rates should start increasing “very soon”.
Trafigura declined to comment on the deals.
