The dramatic VLCC charge is spreading across the board with long term charters, S&P figures and share prices all rising dramatically on the back of the huge spike in spot rates seen since Washington slapped sanctions on Chinese tanker firms, Cosco and Kunlun, taking 50 supertankers out of the market.
Spot rates for VLCCs cracked the $100,000 a day mark yesterday, going as high as $106,000, with deals under negotiation today in the $110,000 region while brokers tell Splash today that one VLCC has been fixed by Mercuria for three years at a very firm price. Olympic Shipping and Management fixed its brand new scrubber-fitted 319,000 dwt Olympic Lyra at a new high of $46,000 a day through to 2022, while one year charters are now being negotiated for in excess of $55,000 a day.
Prices for secondhand VLCCs have also jumped, with 2010-built ships commanding prices 10 – 15% higher than just a month ago, while share prices for all Wall Street-listed tanker players have seen healthy gains in recent days.
The strong earnings for VLCCs have seen charterers seek out suezmaxes, where earnings have leapt to highs approaching $70,000 a day.
“These are among the strongest rates seen in the past decade and the last time the market turned up this strong was in late-2014, which led to a 2.5 year bullish run,” commented J Mintzmyer from US-based Value Investor’s Edge in a tanker report published yesterday.
“Supply chain logistics are dictating charterers’ behaviour more than securing the best and cheapest tonnage from a long list of available tonnage,” Joakim Hannisdahl from Cleaves Securities told Splash today.
“With volatility being a hallmark of the deepsea tanker market it remains hard to assess long-term prospects. However, the short-term rally appears sustained,” said Martin Rowe, a broker with Clarksons Platou in Hong Kong.