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Some momentum in the tanker markets for big ships, but returns still dismal. Sep 7

By • Sep 7th, 2012 • Category: Tankers

The Coracle tanker market podcast for Sept 7, 2012 in association with Braemar-Seascope

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Thanks for downloading the Tanker Market report podcast from Coracle and Braemar Seascope for Sept 7th 2012. This report looks at the VLCC, Suezmax, Aframax and clean products markets.

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It has been a busy week in the world of VLCCs as charterers cherry-picked the best tonnage from the position list, leaving the remaining barrels behind with a tough task to complete at last done levels. On Wednesday there were a few Japanese cargoes in the market, all struggling to keep the rates at last done levels. One charterer managed to get covered at 39, but others were unfixed and trying hard to calm down the sudden rise in rates. As the month is nearing completion, we are looking at a quiet week next week whilst waiting for the October stems to be awarded. AG / West also proved difficult with one market quote sitting on the reports all week without any realistic offers at the level the charterer had in mind.

In the Atlantic, the Chinese have been busy covering early October dates, finishing just in time for the market to pick up a little pace in correlation with the AG. West Africa / East is closing in on worldscale 40 as there are few Atlantic ships around.
The 30 day availability index shows 49 VLCCs arriving at Fujairah, of which seven are over 15 years old, compared to last week’s total of 53. So far for September we have seen 90 VLCC fixtures reported from AG, there are still another 15-20 cargoes to go for the month and October has still not started.

The freight rate for 280 AG / US Gulf is 24, up a point from last week, but with bunkers up$3 to $684/tonne, owners’ earnings for the round trip via the Cape Laden and back through the Suez in ballast are minus $18,000 a day. That compares with 270 AG / S Korea at 39, up 4 points from last week and making owners $500 a day.

Looking at the Suezmaxes and the West Africa market failed to deliver any excitement this week. Rates to the Mediterranean were maintained at 57.5 and 55 for the US Gulf. The Med was also quiet but it could be argued, given the recent woes of those performing cross Mediterranean trips, that it was a step up. A couple of 65’s on short cross-Mediterranean was no triumph, but when 60 was fixed to the Continent, the market seemed to have legs. By the end of the week thing had calmed down once again, and whilst these cross-Med rates have given owners a small piece of respite, trans-Atlantic voyages have not followed suit.

For the Aframaxes it has been yet again another carbon copy of the previous week for the North Sea and Baltic market. Primorsk and Ust-Luga stems have been covered by charterers thick and fast as they take advantage of stagnant freight rates. The current fixing window for TD17 is up to the 23rd September and rates remain flat at 100 at 60. North Sea spot market demand has continued to be non-existent with the majority of North Sea Crude Oil being bought delivered, or COA tonnage being utilised by charterers. Looking in to next week we don’t anticipate any change in freight rates. In the Med and Black Sea, rate levels have remained at rock bottom levels. It is a simple supply and demand situation..
Now the clean markets and it has been a very disappointing week for MR owners in the Middle East. An extremely quiet cargo programme combined with a lengthy tonnage list has dragged rates back down. There has been very little activity on the LR1s and LR2s this week. Rates stayed steady although tight position lists for prompter dates meant a slight rise in levels to the west.

In the West and after a slow Monday on the North West Europe market, due to Labour day in the US, it soon became evident that this week was going to mop up all the tonnage to the middle of the month. With a good amount of tonnage to fix, charterers were able to keep rates from rising dramatically. The majority of TC2 fixtures were being concluded at 37 at 112.5, however, the mood is positive and there is a belief that rates could pick up . This is being seen through the paper trades, even though there are still some spot vessels unwillingly to fix at these levels.

Thanks for listening