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The week started with hope for VLCC owners. Find out how it ended…

By • Sep 27th, 2013 • Category: Tankers

The Coracle tanker market podcast for Sep 27, 2013 in association with Braemar-Seascope

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Thanks for downloading the VLCC Tanker Market report podcast from Coracle and Braemar Seascope for September 27th 2013.

This week started with a glimmer of hope for VLCC owners but ended with hopes crushed, as the reality of readily available
tonnage overcame the firmer sentiment. A number of Far East-based charterers entered the market at the same time due to
holidays and other external factors, this volume started to get owners excited and the longer the charterers delayed fixing or
fixed and failed vessel the more confident owners became.

Petronas didn’t help matters by needing to vet all offers before starting to slowly work throughout the week, it was not down to
any shortage of tonnage but more the confusion and jiggery-pokery of the charterers which gave owners confidence to push
rates up towards 270 at 35 for AG/East. These points are hard won for owners and the fixture of the week was undoubtedly
the Nova tankers fixture 270 at 39 AG/Malacca but having received 10 offers by the time they came to fixing they were left with only one workable ship, hence was an exception rather than a market level. The perceived market reached about 270 at 36 AG/East before the regular party spoilers turned up in the guise of oil company relets and fixed 274 at 34 again thus knocking the stuffing out of a very fragile market.

AG/West was quieter this week with only one fixture done at a point when the AG market seemed strongest at 280 at 24 via the Cape of Good Hope for US Gulf discharge.

West African charterers have been busier, as the final decade of October needed to be covered, reflecting the firmer market in the AG. West Africa/East suddenly picked up to 260 at 37 due to a lack of available vessels in the west and the unwillingness of ballasters to commit from the east with the AG improving. The dire Suezmax market in West Africa has meant that opportunities to parcel up are few and far between. So far we have counted 17 VLCC fixtures and 32 Suezmax fixtures from West Africa making a total export of 67 million barells. There will not be many more VLCCs fixed, whereas with Suezmax, there is still much of the last decade to cover.

From the Indian charterers it was only HPCL who came in the market for their last decade requirement out of West Africa. Charterers received up to six offers for their requirement off 27-28 dates and covered it at $3.2m, on a tonnage opening on the Continent. IOC could have one end month stem out of the region to complete their programme out of the region for October, after which the focus is expected to shift to first decade November stems.

Ships opening up on the Continent are increasingly focusing on the West African market for any realistic chances of employment
putting further pressure on the West African market. We are assessing West Africa/west coast India at $3 m and West Africa/east coast India at $3.3m.

The Caribbean market has also been steadily fixing through the second decade and now we are starting to see laycans for the
final decade of October. The rates have been unaffected by the excitement in various other parts of the market and we are
currently rating Caribbean/west coast India $2.9m and $3.3m for Singapore with a US$900,000 premium for Ningbo.

The 30-day availability index shows 56 VLCCs arriving at Fujairah of which six are over 15 years old compared to last week’s total of 56. So far the first decade has been rather short of cargoes and only 35 fixtures reported, this is no doubt due to the swollen final decade of the previous month.

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