According to the Weber weekly tanker report, in week 14, the demand for VLCCs (very large crude carriers) fell from recent highs due to weak demand in the three key markets of the Middle East, West Africa, and the Americas. The turnaround time at Chinese ports fell, which added to the surplus of vessels. The surplus has put additional negative pressure on tanker rates.
According to the same report, VLCC rates for the route from the Arabian Gulf to China fell to $14,531 per day on April 6, 2018, from $15,949 per day on March 29. The average rate for all VLCC routes dropped to $15,458 per day on April 6 from $16,563 per day on March 29. The current rates are 47% lower year-over-year. In 4Q17, Euronav (EURN) earned a spot rate of $25,889 per day for its VLCCs. During the same period, DHT Holdings (DHT) earned a spot rate of $19,600 per day for its VLCCs.
According to the Weber weekly report, the Suezmax demand in the West African market in week 14 was stronger as charterers progressed into April’s final decade program. Suezmax rates on the route from West Africa to the United Kingdom dropped to $2,737 per day on April 6 from $2,806 per day on March 29, 2018. The average Suezmax rates dropped from $5,603 per day on March 29 to $5,426 per day on April 6, 2018. Nordic American Tankers (NAT) only has Suezmax vessels in its fleet. 50% of Teekay Tankers’ (TNK) fleet consists Suezmax vessels. For Tsakos Energy Navigation (TNP), 43% of its crude tanker fleet is Suezmax vessels.
According to Weber’s weekly report, the rates on the Caribbean Aframax market eased in week 14 due to a rise in availability levels. The rate on the Caribbean route dropped to $5,406 per day on April 6 from $7,157 per day on March 29, 2018.