VLCC owners are slow steaming on ballast legs and idling tankers at key hubs, principally Singapore (see map below), as they try to tide over the dire rates environment, the worst seen since the 1980s. However, the tanker industry has yet to start laying up vessels.
“The VLCC market remains very weak, with returns deteriorating as bunker prices continue to rise,” Banchero Costa noted in a weekly report today.
The Baltic Exchange said yesterday that the TD3 between the Middle East Gulf to China rose by a few decimal points to WS 28.63, but given higher bunker prices the timecharter equivalent earnings dropped further into red figures of $ – 6,549 a day.
Tanker earnings across key clean and dirty routes over the first two months of the year have been the weakest since broker Simpson Spence Young (SSY) began assessing these routes, some dating back more that 20 years.
“MEG VLCC loadings in March are on course to set a new low, based on SSY tracking with brokers projecting 95-100 for the month,” SSY warned in a new report.