It was a more quiet market last week but the freight rates continued its climb. It was primarily VlCC and Suezmax that experienced higher rates and some routes for Aframax. The average for Aframax fell back some but kept itself on a solid level above $30.000 per day.

The positive sentiment in the spot market has pushed up the demand for long-term leases, which in turn has pushed prices up. Several brokerage estimates for 12 month TC contracts are now approaching $17,000 a day, rising from $14,000 a month and a half ago.

It is reported that oil trader Vitol has chartered an Aframax for 12 months to $ 16,500 per day.

Aframax 12 months charter rate: $16.500 per day
Average rate in the spot market: $31.300 per day

Dry Bulk
Baltic Dry Index fell 4,1% last week, and closed at 1.457 points.The rates for Panamax fell 3,3% to $12.263 per day. The recent decline is due to seasonal demand, which is expected to change positively within a short period of time. It is also positive that the average rates for Panamax so far in 2018 are almost $ 19% over last year’s average ($ 11,639 vs $ 9,794).

Capesize 12 months charter rate: $20.000per day
Panamax 12 months charter rate: $13.500 per day

The activity in the secondhand market has been solid the last couple of weeks and we see a clear trend of earnings supporting higher values.

Last week, 2x Aframax was traded in a <<en bloc trade>> for $24,3 millions. The vessels are a 2003 and a 2004 model, both build in Korea. One of the vessels have recently completed its <<special survey>>, while the others will have to go to dock within the next 6 – 8 months. We believe the values in this transaction, shows an upswing from the former transactions, especially considering that <<en bloc trades>> usually gives a discount as the vessels are sold together.

In the dry cargo sector, a Kamsarmax from 2012 was traded for $21 million. This is one of the few transactions that have gone through lately. It is clear that the sellers are not willing to downgrade the prices based on the short-term earnings decline. Increasing rates toward the end of the year are expected to stimulate more transactions.