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Tanker rates come off highs, remain respectable at end Q1Tanker rates come off highs, remain respectable at end Q1

As we move into the second quarter, earnings in the crude and products markets may have come off their year-end highs, but remain at reasonably respectable levels.

Ian Middleton, Former Tanker Correspondent

April 3, 2015

1 Min Read
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In the VLCC market, average earnings are just below $40,000 a day, according to Clarkson Research figures, against just over $50,000 a day for the year as a whole so far. Suezmax earnings are just under $45,000 a day, not far below the $50,000 a day for the year as a whole, while aframax earnings at around $37,500 a day are close to the yearly average of just under $40,000 a day.

In the products market, LR1s and LR2s are earning just above the yearly average at $27,000 and $28,000 a day, while only dirty product tankers have dropped significantly from this year's average, above $30,000 a day, to around $23,000 a day.

The delivery schedule for this year is relatively unthreatening with 7.8m dwt of VLCCs due, just 2m dwt of suezmaxes and 5.1m dwt of aframaxes. The crunch comes next year when 16.8m dwt of VLCCs are due to deliver, 4.6m dwt of suezmaxes, and 5.6m dwt of aframaxes. A heavy product carrier delivery schedule over the next two years could cause problems in the aframax and MR segments.

Demolition activity is running well below last year's rate in the crude tanker sector with one aframax and no suezmaxes so far, and only two VLCCs, and demolition prices have fallen massively since last Autumn. Tankers for India are attracting under $400 per lightweight against highs of more than $500 per ldt last September.

Fortunately the rate of tanker contracting appears to have slowed after last years flurry, but the tanker orderbook remains in the mid-teens in percentage of the fleet terms.

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About the Author

Ian Middleton

Former Tanker Correspondent

Ian Middleton is former editor of Tanker Trends, and before that of both Seatrade magazine and Seatrade Week. After having begun his career with a leading UK newspaper chain, Ian joined Seatrade in the late 1970s, allowing him a ringside view of the up's and down's of the shipping business from the 1980s slump onwards.

With his specialist knowledge of the tanker market, Ian is one of Seatrade's most experienced writers and a practised conference speaker and moderator.

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