VLCC Suezmax Aframax Panamax Handy

Transcription

1 WEEK 5 16 DECEMBER 211 ISSUE Aframaxes: As USG imports ease, Libyan exports rise With fresh access to WTI crude cleared at Cushing, OK, set for gulfarea refiners by 2H12 with the planned reversal of the Seaway pipeline, Aframaxes will face fresh difficulties on the key Caribbean market routes servicing the US gulf during 212. YTD, some 86% of all spot market activity on the CBS USG routes were serviced by the Aframax class and the Caribbean accounts for the greatest share of USG area deliveries, exceeding the Middle East. Thus, the implications of a slowdown in this market are quite negative particularly amidst projections for the Aframax fleet to experience a net fleet growth of 4.8% during 212. VLCC TD1 TCE 28k AG-USG -$1,25/Day 1-11 MoM -178% kmt Cargo 5, 45, 4, 35, 3, 25, USG Deliveries by Servicing Tanker Class (YTD) Spot Market Fixtures VLCC Suezmax Aframax Panamax Handy S MAX TD5 TCE 13k WAF-USAC $16,/Day 1-11 MoM -36% 2, 15, 1, 5, Data: C R Weber CBS MEG & RSea WAFR Med & BSea UKC & NSea Helping to offset the potential decline in Aframax fixtures to the USG, Libyan crude oil production and export levels have risen well in excess of expectations. Estimates of the present Libya production rate range between 8, and 84, b/d approximately half of the pre war level. Libyan exports surged last month with 17 Aframax cargoes materializing; during 21 an average of 16 Aframax cargoes were fixed each month. As the November fixture count likely includes quantities produced in the transitional period which were only recently exported from inventories, it is expected that the monthly count will moderate to about 8 or 9 cargoes during 1H12 with a gradual rise thereafter. We previously estimated that the Seaway pipeline reversal implies a reduction of about 7 Aframax cargoes per month on the CBS USG routes. Given average voyage durations, the potential decline of USG deliveries accounts for about 44 laden days per month whilst the expected gains in Libyan liftings account for about 38 laden days per month. Although small, the net loss of 6 laden days is undoubtedly an unwelcome development for Aframax owners. Put into perspective, however, Aframaxes are to see a net gain of 66 laden days per month relative to the earlier complete halting of Libyan liftings. A MAX TD9 TCE 7k CBS-USG P MAX TD1 TCE 5k CBS-USAC MR TC3 TCE 38k CBS-USAC $9,5/Day $1,/Day $9,5/Day 1-11 MoM -56% 1-11 MoM -62% 1-11 MoM -18%

2 Spot Rates Trade Cargo WS TCE VLCC $/day TD1 AG>USG 28, MT 36. -$1,5 TD2 AG>SPORE 26, MT 56. $19,3 TD3 AG>JPN 26, MT 56. $21, TD4 WAFR>USG 26, MT 65. $27,7 TD15 WAFR>CHINA 26, MT 62.5 $24,6 US Crude Stocks (EIA) WoW -3.4% SUEZMAX TD5 WAFR>USAC 13, MT 92.5 $23, TD6 B.SEA>MED 135, MT 95. $28, AFRAMAX TD7 N.SEA>UKC 8, MT 125. $31,6 TD9 CBS>USG 7, MT $14,8 TD19 TRK>MED 8, MT 13. $27, PANAMAX TD1 CBS>USAC 5, MT $11,1 TD12 CONT>TA 55, MT 13. $11,1 US Gasoline Demand (EIA) Mb/d 1-11 WoW -7.3% CPP TC2 CONT>TA 37, MT 22. $2,3 TC3 CBS>USAC 38, MT 175. $13,2 TC4 SPOR>JPN 3, MT $3,8 TC1 LR2 AG>JPN 75, MT 1. $1,2 TC5 LR1 AG>JPN 55, MT 12. $8,5 Time Charter Rates $/day (theoretical) 1 Year 3 Years 5 Years VLCC $16,5 $24,75 $3, Suezmax $16,75 $2,75 $22,25 Aframax $13, $17, $18,5 Panamax $13,5 $14,75 $16,5 MR $13,75 $14,75 $16,5

3 THE TANKER MARKETS VLCC Overall VLCC activity declined this week by 28% from last week, with a total of just 26 fixtures reported despite a robust week for VLCCs in the Atlantic basin. In the Middle East market, the monthly cargo count remains at a relatively high level with 131 December cargoes fixed to date. With January historically producing a greater number of Middle East cargoes, the market generally remains firm through December in anticipation of the longer program to come. With 2 units projected to spillover from December to January, however, this has not been the case and as the market progresses further into January rates are expected to prove weaker. This reality appears to have already been absorbed by the market, as evidenced by the slight drop in Middle East rates recorded this week. Moreover, the January TD3 contract is presently trading at ws45.27 which equates to ws53.96 basis 211 flat rates and represents a 2 point decline from present rates on the route. Some 14 Middle East fixtures were reported this week, including one to the west and thirteen to the far east. The average rate reported to the west was ws38, representing a one point decline from last week. Rates are presently trading at ws37, with a correlating TCE of about $6/day. Rates to the far east eased 1.7 points, w/w, to an average of ws Despite the rate decline, the average TCE gained $4/day, w/w, to an average of ~19,8/day on the back of easing bunker prices. Triangulated Westbound trade earnings are presently ~$26,/day. The December Middle East program has likely completed, with a total of 131 cargoes, and some 8 January cargoes have been covered to date. Despite the rebound of oil production in Libya (official data suggests over 8, b/d during December) and a recent surge in Libya s exports, comments made by Saudi Arabia s oil minister to Reuters suggest that Saudi production will remain driven by demand rather than supply. Accordingly, Saudi exports are expected to remain strong allowing the Middle East program to yield at least 13 cargoes for January. During the week ahead, the 2 spillover units will undoubtedly weigh on rates as charterers progress into the January program; whether this implies a softening in rates, however, will depend on the materialization of a rush in inquiry ahead of the long Christmas weekend. Such a drive would likely hold rates steady; failing this, rates in both directions may decline slightly. In the Atlantic basin, a surge in activity failed to boost rates as more ballast units appeared due to the weakening Middle East market. With the Suezmax class attracting greater inquiry in the Mediterranean as an alternative to Aframax class (for which rates firmed significantly through mid week) Suezmax rates in the Atlantic followed shortly thereafter, firming to the high ws8s. 5 VLCC Projected Deliveries/Removals Suezmax Projected Deliveries/Removals Aframax Projected Deliveries/Removals Panamax Projected Deliveries/Removals MR Projected Deliveries/Removals

4 With the stronger Suezmax market having already encouraged greater co load interest for VLCCs, rates on the larger class were able to hold at the ws57.5 level for Eastbound voyages, whilst the trans Atlantic route saw one fixture reported at ws During the week ahead, the strengthening Suezmax class should continue to encourage co load inquiry, which could see rates post a slight gain. The Caribbean East market was active, with 4 fixtures reported to Singapore. Rates on this route were stable around the $3.9m level. Further ballast units could see rates hold within the $3.9m $4.m range during the upcoming week, otherwise a slight gain should materialize Projected OECD Oil Demand OPEC OECD IEA OECD EIA OECD Suezmax Sustained activity in the Atlantic Suezmax market combined with gains in the Black Sea/Mediterranean market as charterers there sough an alternative to the surging Aframax class led to gains in both markets. The TD5 benchmark route extended last week s gains, rising a further ten points this week to conclude at ws82.5. The TD6 benchmark route also gained 1 points, concluding at ws95. Although Aframaxes are now correcting from their earlier highs in the European markets, Suezmaxes should remain firm during the coming week as charterers rush to cover remaining cargoes ahead of the holiday weekend Projected World Oil Demand OPEC World IEA World EIA World Aframax On the back of last week s surging Mediterranean and North Sea markets, owners were markedly more bullish on the Caribbean market early this week. The TD9 benchmark route saw a quick gain of 3 points to the ws13 level. However, as the week progressed and the European markets started to lose steam, owners in the Caribbean were less successful in their threat of ballasting across the Atlantic, and the reality of an unbalanced supply/demand had set in. Accordingly, rates corrected to ws127.5; further losses should materialize next week failing a pre holiday rush. Percentage Change, 13+kMT fixtures, 21-11, YTD (Middle East and West Africa liftings) Panamax Both the Caribbean and European Panamax markets saw early gains this week as fresh activity thinned available tonnage lists. In the Caribbean, the TD1D benchmark route gained 12.5 points to ws14 by mid week before ultimately easing back to ws With fog delays in the USG and a few prompter USG cargoes having failed towards week s end, fresh gains could be realized during the upcoming week. The TD12 benchmark route gained to points to ws13 this week; owners remain bullish which should see further gains during the week ahead.

5 CPP The MR market saw strong gains this week on the back of a surge in activity across the Western markets. In the Caribbean, charterers rushed to cover requirements ahead of the holidays whilst fog delays off the USG and weather related delays off ECMexico emerged. The trifecta saw a 25 points gain over the course of the week to ws175 on the TC3 benchmark route. USG exports remained strong, with sustained activity on fixtures bound for Europe, Brazil and elsewhere. Rates on the USG TA route gained 25 points to conclude at ws145. With date sensitivity an issue for various charterers keen to export before year end, owners remain very bullish which should lead to stronger rates next week. In the European market, a flurry of fresh inquiry surprised the market which had expected redelivery of vessels from the USG to prove sufficient to meet demand this week. The fresh activity saw owners turn incrementally more bullish and very strong gains materialized the TC2 benchmark route surged 55 points this week to ws22 (with one vessel reportedly on subjects at this level), which is a 7 month high. With TCE returns on the TC2 route of ~$2,3/day some $7,1/day above those on the TC3 route owners coming free on the USAC may forgo the recent norm of ballasting towards the CBS/USG area in favor of ballasting back to Europe. Whilst this may limit further TC2 gains as available tonnage is projected to Europe, it should contribute to further gains in the USG and CBS. 13+ kmt Fixtures AG/West kmt Fixtures AG/East kmt Fixtures WAF/West kmt Fixtures WAF/East

6 REPORTED TANKER SALES SUMITOMO HULL # ,28/Feb 12 SUMITOMO DH Sold for $43.5 mill. to Greek buyers (Samos Steamship). SANKO NATURE 19,999/11 FUKUOKA DH Sold for $28 mill. to Norwegian buyers (Hansa Tankers). NEWLEAD FORTUNE 73,495/4 NEW CENTURY DH NEWLEAD AVRA 73,4/4 NEW CENTURY DH NEWLEAD COMPASSION 72,782/6 DALIAN DH NEWLEAD COMPASS 72,768/6 DALIAN DH Sold en bloc to Chinese buyers (BW Shipping). Price reflects TC employment of NEWLEAD COMPASSION AND NEWLEAD COMPASS until 2/216 at $13,65/day through 2/215 followed by profit sharing and TC employment of NEWLEAD AVRA until 1Q12. REPORTED TANKER DEMOLITION SALES ORION TRADER 267,736/98 39,25 LDT DH Reportedly sold for demolition, details unknown. OHMINESAN 267,721/96 39,4 LDT DH Reportedly sold for demolition, details unknown. PAKISTAN: FSO LAKISMIATI 81,275/75 18,828 LDT DH Sold for $455/ldt basis as is, Indonesia. Unit was converted from oil tanker 11/23. INDIA: NORLAKE 39,13/82 1,785 LDT DH CHEMICAL Sold for $45/ldt, basis as is, Suez. Converted to DH 9/28. $57 $55 $53 $51 $49 $47 $45 $43 $41 $39 TANKER DEMOLITION VALUES, $/LDT /11 weeks Bangladesh China India Pakistan FOR THE LATEST MARKET DATA AND NEWS GO TO: HUWWW.CRWEBER.COMUH George P. Los, Senior Market Analyst Charles R. Weber Research H Charles R. Weber Company, Inc. Greenwich Office Park One, Greenwich, CT 6831 Tel: Fax: research@crweber.com