Suezmax rates have reached their highest level since January 2014, said Paddy Rodgers, CEO at Euronav, Belgium-based tanker owner and operator, adding that crude oil tanker rates should remain strong in the coming months due to positive seasonal demand factors and improving underlying supply/demand fundamentals.
“The second quarter was dominated with one of the longest and deepest turnaround seasons for refineries we have seen which reduced demand for crude oil. However, the underlying picture of a more balanced market had not changed and once refineries were back up towards the end of the second quarter, positive pressure started to build on freight rates,” the company said in its preliminary half year results.
Initially the freight market showed plenty of resistance as smaller ship owners who could not benefit from the flow of information only major players have access to, were persuaded by charterers that there were more competing ships than was really the case. This was eventually overcome and rates moved up significantly on both the VLCC and Suezmax segments.
Speaking of the outlook, as there is very limited tonnage increase forecast, Euronav believes the market will be volatile and if current momentum maintains through the third quarter, then the winter (in the northern hemisphere) will get off to a strong start.
Based on the company’s preliminary figures for the first year half, in the third quarter, Euronav VLCC spot fleet operated in the Tankers International pool has earned on average USD 22,600 per day and 37% of the available days have been fixed.
Euronav’s Suezmaxes trading on the spot market have earned on average USD 21,800 per day and 53% of the available spot days have been fixed.
Euronav is set to receive one more VLCC Maersk Isabella from the acquired Maersk fleet by the end of this month.
The VLCC pertains to the remaining pair of ships pending delivery, the remaining one (Maersk Sandra) being scheduled for no later than 30 March 2015.
Press release, July 24, 2014