62 VL’s at Fujairah next 30 days is 30% increase from last week. Tanker report Mar 22By james tweed • Mar 22nd, 2013 • Category: Tankers
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Thanks for downloading the Tanker Market report podcast from Coracle and Braemar Seascope for March 22nd 2013. This report looks at the VLCC, Suezmax, Aframax and clean products markets.
VLCC owners have been trying to get onto the front foot this week and push the market up from last week’s levels , and to a certain extent they have had some success. All success is relative but being able to move rates up from 270 at 33 to 37.5 was quite a move. However, since then, some charterers have spotted the owners’ desire for AG/West via the Suez Canal and we saw steady fixing on this route at Worldscale numbers down to 15.5 whilst going via the cape pays more in the region of 280 at 19.
These rates are basically only giving positive earnings for a one-way voyage, ignoring the ballasting costs. Owners must fight hard for each point or half point in either direction, and charterers can often spot the weaker ship and take advantage. We are still at operating cost levels for the moment and we are perhaps moving away from the traditionally more lucrative part of the year and into the second quarter. West Africa has seen about 20 million barrels fixed from the area over the second decade on VLCCs, which caused rates to drift upwards from 260 at 36 to 38.5, and hinting that perhaps there are fewer than usual Suezmax cargoes left to come for the second decade of April.
The 30 day availability index shows 62 VLCCs arriving at Fujairah, of which seven are over 15 years old, compared to 42 last week. This is a 30% increase in available marketed tonnage and should warm charterers’ hearts. March totalled 107 reported fixtures from the AG and we have seen 29 thus far for April. Owners will need to continue to work hard to keep rates even where they are today. The bunker price is $627/tonne, down $5 from last week.
The West African Suezmax market this week was one built for opportunistic owners to drive rates up, but the chance was not taken, not even after a week beginning with 80 for USAC for a replacement fixture. Rates actually kicked off slightly below those we were seeing last week, with 52.5 for the US Gulf early on. But they soon stabilised at 55 for the Gulf and 57.5 for cont-med.
In the Mediterranean the week got off to a quiet start, with 60 being fixed to the UKCont. Going further afield, 50 was paid to Brazil whilst $2.6m was done for Singapore. In the Black Sea, activity was skewed towards the tail end of the week. After a quiet start, rates held at previously done levels. The list was tighter than expected for the early April position ex-Black Sea and slightly higher numbers were achieved. There still appear to be a couple of stems to cover in the first ten days so we could see rates push up further, although charterers will do their best to hold them to current levels.
The Baltic and North Sea Aframax markets were showing signs last week that rates would firm and this is exactly what we have seen. On the back of replacement cargoes and a tightening of ice class tonnage for end/early Baltic stems, owners finally managed to push rates to, and above, the 100 barrier as charterers moved to cover end/early stems from Primorsk and Ust-Luga. Fuel oil is paying a 5 point premium over crude but now that early April stems have been covered, charterers are taking a step back. Cross-North Sea has seen a healthy flow of activity, with a strong presence of cargoes in the market and unconfirmed rumours of 80 at 102.5 is on subs.
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