For the first time ever, 0 single hull tankers at Fujairah. Tanker report Dec 1By james tweed • Dec 2nd, 2011 • Category: Tankers
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Thank you for downloading the Tanker Market report podcast from Coracle and Braemar Seascope for December 1st. This report will look at the VLCC, Suezmax, Aframax and clean products markets.
Over the last 7 days we have reported 23 AG VLCC fixtures, but in some ways this does not represent the struggle which has been going on as owners have been trying to move rates back into the 265 at 60s with charterers determined to get rates back into the 50s. At the time of writing it would seem that the honours are split. Owners are all the more determined, as the year has been mostly spent in the 40s and, if there is no “winter market”, their hopes of any salvation in 2011 could be put to the sword. It seems to take a Herculean effort to move rates up 2 and half points and a similar strain for owners to keep them there. The dreaded re-lets are usually the ones to erode the market. Last week, the re-let Harad put his trousers on back to front and fixed 4 points below the market, and 10 points below last done, before realising that he didn’t have any competition at those levels. AG/West has been steady, with cargoes covered until the last decade and rates remaining around the 280 at 38.5 level.
The 30 day availability index shows 56 double hulls, and for the first time ever there are no single hulls on the tonnage list. So far, 78 cargoes have been fixed for December, leaving another 35 to fix. With about 50 VLCCs available for those laycans, there should be no trouble for charterers to find willing partners. The freight rate for 280 AG/US Gulf is 38.5, 4 points less than last week and with bunkers at $691 a tonne, up $19 from last week, owners’ earnings are minus $3,500/day. This compares with 270 AG/East at 60 and making owners $20,000/day.
Turning to the Suezmaxes and the end of last week in West Africa saw some unexpected early dates enter into the market. What looked like a long Suezmax list turned into one that was short on tonnage for those dates. Consequently, rates increased to 81 for UKCont-Med. While some owners didn’t immediately react to the rate increase the general confidence in the market increased. Charterers then added fuel to the fire by coming in straight after the holidays in the US with a raft of mid-month cargoes, pushing rates further north. Dates in the middle decade were attracting some big numbers and with a good level of fixing the tonnage list has thinned. However, a cargo quoting of 20-21 dates received 10 offers and managed to fix 87.5, which is totally at odds with the sentiment we have seen this week. It will be interesting to see if this downward sentiment will continue in the near future. Moving into next week, the party season begins and this may lead to good levels of quick fixing which may have an impact on rates.
With West Africa leading the way in the suezmax market, the Black Sea/Med market did its best to follow on behind. The end of last week saw a couple of fixtures done at the equivalent of 140 at 75 and these rates pushed through into this week. It looks as though Novorossiysk is covered up to the 22nd, which should only leave 4 cargoes to cover. The delays in the Turkish straits have increased to 4 days and this has put a bit more pressure on the list. However, there don’t look to be enough cargoes left to drive rates further up. We saw a number of ships lift cargoes out of Libya and a couple of Sidi Kerir voyages.
The last seven days have seen increased activity for aframaxes in the Baltic, NW Europe and the Mediterranean. However the increased activity has failed to increase owners’ earnings, and they have in fact eased off further since this time last week. Primorsk stems have been covered thick and fast this week, currently fixing up until 17th December. After as many as 10 tenders were awarded from Primorsk this week and with the looming holiday party week in London next week, charterers have been keen to cover stems in advance as well as owners wanting to fix their ships away. Charterers have done their job and covered advance stems at low levels with some owners having to take a hit on spot tonnage with a lengthy wait for the cargoes. T
Looking at the clean markets and in the East the LR2s have seen more activity although tonnage remains long. Several Japanese re-lets failed subs in the first half of the week which pretty much stalled any firming sentiment. However, Total’s stringent approvals saw them have to pay up at 115 for a mid-month stem. LR1s have been quiet, despite owners trying to push for 130 to Japan and in excess of $2 million for the UKCnot. BP managed to cover their remaining 16-17 jet stem west at $1.975m to the UKCont, which was a slight increase on last done, but not as much as owners had hoped they may be able to achieve.
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