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The tanker market in 2024 exhibited remarkable resilience

The tanker market in 2024 exhibited remarkable resilience, achieving sustained profitability amidst considerable market volatility across various vessel segments. The following retrospective analysis delves into the year's market dynamics, drawing insights from the Baltic Exchange's TCE data. In the crude tanker sector, we witnessed larger vessels experiencing peak earnings early in the year. VLCCs which started 2024 strongly, reached their zenith on Feb 16th with a TCE rate of $65,537/day. However, the segment has since experienced a gradual decline, currently (18th Dec) being at $24,357/day - marking both a 19% decrease from the year's start and the segment's lowest point in 2024. Suezmax tankers followed a similar pattern, reaching their peak even earlier than VLCCs with TCE rates hitting $67,219/day on 17th Jan. The segment faced its challenging period in September, touching a low of $22,224/day on Sept 6th. However, showing remarkable resilience, rates have since rebounded and currently stand at $28,289/day - while this represents a 44% decrease from the start of the year, it's notably 27% above the year's lowest point. The Aframax segment has demonstrated particularly interesting dynamics. After reaching an impressive peak of $79,979/day on 16th Jan, rates experienced a significant correction, bottoming out at $19,954/day on 25th Sept. However, the segment has shown strong recovery, with current rates at $36,160/day - though this is 22% lower than the year's start, it represents an impressive 81% increase from the year's lowest point. The clean tanker market has told a tale of two regions. The Atlantic MR segment has been a stellar performer, currently trading at $37,300/day, marking a 34% increase from the start of the year. The segment reached its peak of $53,372/day on 31st May and, despite touching a low of $15,694/day on 30th Sept, has rebounded impressively to levels 138% above the year's lowest point. In contrast, the Pacific MR market has faced more challenges. Current rates of $16,415/day represent a 42% decrease from the year's beginning. While the segment saw impressive heights of $59,894/day on 31st Jan, it later experienced a significant downturn, reaching its lowest point of $11,218/day on 5th Nov. Current rates, while 46% above the year's lowest point, reflect the continued challenges in this region. This varied performance across segments and regions underscores the complex dynamics at play in the tanker market throughout 2024, with each segment responding differently to market forces while maintaining overall profitable levels.

MR2 vessels have been the primary driver of tanker S&P activity, responsible for nearly more than one-third of all sales. The Aframax/LR2 segment comes in second, with 61 sales, 33 of which were product tankers. The increasing preference for clean trading options has significantly boosted the demand for MR2/LR2 vessels. Their versatility in handling both clean and dirty cargoes make them attractive to a diverse range of shippers and traders. From Jan to Nov 2024, we saw 562 newbuilding orders placed. However, only 7% of these orders were signed in Q4 so far. Q2 2024 witnessed the highest number of newbuilding orders for the year, with 259 orders. However, since Q3, we have observed a decline in the number of orders. One reason that may explain the decline in newbuilding activity is the availability of shipyard slots and the delivery schedules of vessels currently under construction. Approximately 13% of the 562 tankers ordered in 2024 are scheduled to be delivered in 2028 or later.

Sale and Purchase

Dry:

With the last week of December upon us and the Christmas holiday season rapidly approaching, many shipowners engaged in year-end transactions. The Scrubber fitted Newcastlemax "Sikamia" - 208K/2008 Universal was sold for USD 29 mills to Chinese buyers, while the one-year-older "Panoramix" - 204K/2007 CSBC was also sold to Chinese buyers for USD 28 mills. The Kamsarmax "Twinkle Island"- 82K/2012 Tsuneishi was sold for USD 20 mills to clients of Orion Bulk basis 2-year BBHP. On the same sector, the "Bettys Dream" - 82K/2008 Tsuneishi changed hands for USD 12.88 mills. The Supramax "SSI Nemesis" - 56K/2005 Mitsui found new owners for USD10.9 mills. Last but not least, Greek buyers acquired the Handysize "Momo Glory" - 28K/2014 Imabari for USD 12 mills.

Wet:

The tanker market also experienced a busy week, with the small/chemical sector leading in tanker S&P activity, recording 5 transactions. The LR2 "Crude Centurion" - 113K/2010 New Times was sold for USD 33.5 mills. The Zinc Coated MR2 "Kyra" - 48K/2006 Iwagi changed hands for USD17.1 mills. The Ice Class II "DH Honesty" - 13K/2021 Nantong Tongbao was sold for USD 25.6 mills via auction. The StSt "Monax" - 21K/2005 Usuki and the StSt "Marmotas" - 20K/2005 Usuki were sold for mid/high USD 15 mills each. Finally, the "Cumbrian Fisher" - 13K/2004 Samho changed hands for USD 7.15 mills.

Xclusiv Shipbrokers Inc.