VLCC spot rates rocketed on Tuesday as the Baltic Exchange’s average of earnings in the sector reached its highest level in 28 months.
New York shipbroker Poten & Partners reported that average time-charter equivalent (TCE) earnings for a 270,000-dwt VLCC with no scrubber jumped to $78,400 per day on Tuesday.
That’s a 19% gain on the $65,700 per day figure reached on Monday for a journey from the Middle East to Asia.
The bullish reading came as the Baltic Exchange’s assessment of average spot TCE earnings reached just under $49,000 per day on Tuesday, the highest level since 4 May 2020.
The jumps came on the back of steadily rising rates on fixtures to Asia.
Tankers International data shows that Thai oil company PTT fixed the Thenamaris-operated, 319,000-dwt Seaking (built 2005) at a WorldScale rate of WS 110, or the equivalent of $97,100 per day, even though the scrubber-fitted vessel is roughly 17 years old.
That compares to a last-done rate of WS 95 on the route, which was achieved a day earlier for another vessel that was more than 15 years old.
In the Atlantic market, IndianOil grabbed the 297,000-dwt Skopelos (built 2010) from operator Embiricos Group for a voyage from West Africa to India’s west coast for a lump-sum fee of $7.55m, which equates to a TCE rate of $77,200 per day.
That’s up from the $7.25m earned by the last VLCC booked for the route more than a month ago. Neither ship had a scrubber.
More gains expected
The rate gains are expected to continue.
“Brokers note that tonnage lists are light for all natural fixing windows and the owner sentiment is extremely bullish, and thus expects rates to continue to rise,” said analyst Frode Morkedal of investment bank Clarksons Securities.
The more bullish outlook was reflected in the futures market, where forward freight agreements for the benchmark VLCC route from the Middle East to China generally moved higher on Tuesday, though the forward curve declines from here.
November contracts surged more than $2,100 to $70,300 per day. And although December contracts plunged nearly $2,300 to $67,500 per day, FFAs for January, February and March all moved higher.
But VLCCs were not the only rising tanker segment.
“All segments are up!” trumpeted Poten & Partners on Twitter.
The broking house said suezmaxes on the route from West Africa to Europe saw their TCE spot rates jumped to $51,100 per day from $49,800 on Monday.
Aframax and panamax crude tankers, as well as MR, LR1 and LR2 product tankers also saw gains on benchmark routes.
This article has been amended since publication to reflect that VLCC rates hit a 28-month high.
