The tanker spectrum experienced a broad retreat in crude and product tanker earnings on Thursday as market players cooled down following the recent rate rally.
On the Baltic Exchange, spot time charter equivalent earnings of VLCCs for the TD3C Middle East-China route were assessed at $112,621 per day as of Thursday afternoon, down $22,370 from Wednesday.
On a Worldscale basis, the TD3C rate dropped to WS133 from nearly WS155.
Navios Maritime Acquisition reportedly chartered the 297,066-dwt Nave Universal (built 2011) to Unipec for this trade at WS120, with a load date between 8 and 10 november.
The ship is thought to be previously named Shinyo Kieran, one of the two VLCCs Navios Acquisition chartered to Cosco Shipping Dalian (Tanker) Co on a long term basis.
In an exchange filing, the New York-listed owner said the charter contracts for both ships were terminated after Washington put Cosco Dalian on the sanctions list on 25 September for allegedly transporting Iranian oil.
It was not known whether the below-market rate was related to sanction risks. An email seeking comment from Navios Acquisition has not been responded at the time of writing.
Having spiked above $300,000 per day on Friday, the TD3C TCE earnings have retreated with Asian refineries planning to reduce crude imports amid shrinking margins.
Earnings of other types of tankers have also fallen from multi-year highs, following the lead of VLCCs.
Average suezmax earnings on the Baltic Exchange fell to $119,181 per day as of Thursday afternoon, down $9,112 from the day-ago level, while average aframax earnings decreased by $91 to $64,281 per day.
The recent rally of product tanker earnings has also largely come to a halt.
The Pacific basket TCE for MRs dropped $225 to $39,238 per day on Thursday while the Atlantic basket TCE tumbled by $4,720 to $24,410 per day.
On the Middle East-Japan route, LR1 earnings fell by $6,579 to $43,931 per day. LR2 earnings inched higher by $186 to $73,650 per day, though.
According to some market player, the supply-demand fundamentals in tanker markets remained strong in general, and the recent fallbacks were mainly a result of charterers taking a breath following a busy week.
“I would not read too much into it,” said a tanker player.
Many owners and analysts have pointed out that tanker earnings are likely to stay at an elevated level in the coming months, with seasonal oil demand, IMO 2020 and the removal of Cosco Dalian tonnage from international trading, among other factors.
“I guess things will be volatile over the next few weeks…[earnings] levels should still be quite strong,” said a broker.
