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Q4 earnings confirms ongoing strength in the tanker market.
Tanker earnings for Q4 2023 and full year 2023, started last week with Scorpio Tankers, showing ongoing rates strength and providing insights to the longevity of the market with ongoing oil demand growth against a low orderbook. While Scorpio Tankers focuses on product tankers, the earnings supported the wider market with Frontline, a leading crude tanker owner, reaching a new 52-week high. Additionally, last week, OPEC shared its 2024 oil demand outlook, forecasting growth of 2.2mb/d in 2024, a significant increase to the IEA’s recent forecast for growth of 1.2mb/d.
“VLCC rates hit a 9-month high, bringing optimism across crude tanker segments and secondhand prices of a new Suezmax hit $99m +15% vs. YA”
Tanker markets had a positive week, with the VLCC market standing out with large rate increases, particularly for the route between the Middle East Gulf and China The move in VLCCs followed a few weeks of choppy rates and was a powerful move higher that also supported the Suezmax and Aframax markets. Suezmax second hand prices of a new vessel hit $99m, showing significant market strength. Owner sentiment is bullish heading into next week. Aframax markets moved slightly higher with mixed moves on a route-by-route basis.
Aframax ECO, 12 months TC
Aframax, Average spot
Suezmax ECO, 12 months TC
Suezmax, Average spot
Source: Clarksons Research
Bulk markets holding steady at a higher level.
Last week bulk markets maintained their higher levels after a step up in rates from the previous week. Rates were steady across the vessel segments with very slight moves higher in Panamax, and Handy markets. Activity levels were somewhat muted because of the New Year holidays in Asia, but sufficient to maintain rates.
“Bulk momentum building after Lunar New Year holidays wrap up”
Capesize markets were mixed with some softening on routes from Brazil to China, but from a higher level, and with a less certain picture for the next move as demand weakened somewhat towards the end of the week. Panamax markets were supported by strong demand from Australia to Indonesia cargo volumes and also supportive demand from South America. Handy rates were positive, with good activity levels in the Indian Ocean and South Africa.
Capesize, 12 months TC
Kamsarmax, 12 months TC
Source: Clarksons Research
Leading PCTC owner Wallenius Wilhelmsen posts record profit.
With more PCTC earnings last week, Wallenius Wilhelmsen, the world’s largest operator of car carriers, reported its Q4 2023 earnings, revealing record profits for 2023.
Wallenius Wilhelmsen CEO Lasse Kristoffersen said the results were “very much” driven by growth from China. The Chinese market is facing a weaker domestic economy with a troubled housing market, and as a result, manufacturers, including Western brands with factories in China, are setting sights on exports to compensate for domestic demand weakness. Wallenius Wilhelmsen forecast 26% vehicle export growth from China year-on-year for 2024.
Wallenius Wilhelmsen’s earnings presentation also highlighted the delivery schedule of newbuilds, highlighting that significant supply won’t come onto the market until 2025, supporting a very strong earnings outlook for the near-term. The presentation also highlighted the Red Sea impact on supply, expecting re-routing via the Cape of Good Hope to negatively impact tonnage capacity by approx. 4-6% This further constrains supply in a market that is already operating at near full utilization.
5000 CEU – 12 months TC
6500 CEU – 12 months TC
Source: Clarksons Research
| Type | Tons | + /- | ||
|---|---|---|---|---|
| VLCC | ||||
| Suemax | ||||
| Aframax | ||||
| MR |
| Type | Resale | 5y | 10y | |
|---|---|---|---|---|
| VLCC | ||||
| Suemax | ||||
| Aframax | ||||
| MR |
| Type | Tons | + /- | ||
|---|---|---|---|---|
| Capesize | ||||
| Panamax | ||||
| Supramax | ||||
| Handysize |
| Type | Resale | 5y | 10y | |
|---|---|---|---|---|
| Capesize | ||||
| Panamax | ||||
| Supramax | ||||
| Handysize |
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