A key indicator of VLCC spot earnings lost 7.7% on Thursday, bringing the market to the lowest point of the year.
The drop came as a Unipec charter of a Mercuria-operated tanker showed further pain on the benchmark Middle East to China trade.
The Baltic Exchange’s index of average time charter equivalent rates for VLCCs fell $2,220 to reach $26,400 per day on Thursday.
The figure repeats Wednesday’s fall of $2,169 on a trajectory that has been spiralling downward since the index reached its month high of nearly $38,700 per day on 19 August.
Thursday’s figure not only erases all of the short-lived August spike, it is the lowest level for the index since the close of last year.
The day’s fixtures included the booking by Unipec, the Chinese refiner that is a major force in the VLCC market, of the 319,200-dwt Agios Nikolas (built 2019) for a voyage from the Middle East to China at the equivalent of just over $23,000 per day, according to Tankers International.
The scrubber-fitted ship is owned by Greece’s Enesel but under the commercial control of Mercuria, the Swiss trading house.
When taken on a round-voyage basis, which allows comparison with other fixtures on the route, the rate of $23,300 per day is below the $24,600 that Unipec agreed to pay for a similar scrubber-fitted ship a day earlier.
And for Mercuria, the rate is well below the $40,500 per day break-even rate for the Agios Nikolas, according to Tankers International estimates.
Bharat Petroleum picked up Adnoc Logistics & Services’ 299,400-dwt Al Bahyah (built 2023) for the equivalent of $12,300 per day for a trip from the Middle East to India’s west coast. The dual-fuel vessel can operate on LNG.
The $18,700-per-day round voyage is an improvement on the last-done fixture on the route, which saw a loss-making charter of just $5,670 per day a week ago, according to Tankers International.
VLCC futures suffered a blow on Thursday as well, though they continue to point upward.
Baltic Exchange data showed September contracts on the Middle East to Asia route fell 2.57 WorldScale points to WS 51.1, which is still better than Thursday’s spot rate of WS 44.7.
Forward freight agreements for December, when the market is expected to peak, held steady, dipping just 0.3 points to WS 66.7.
