VLCC podcast from Coracle and Braemar Seascope (also in Mandarin)By james tweed • Nov 3rd, 2013 • Category: Tankers
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Thanks for downloading the VLCC Tanker Market report podcast from myCoracle.com and Braemar Seascope for November 1st 2013.
This week we have seen charterers trying to regain confidence within the market by holding back on cargoes and trying to entice insecurities within the owner’s outlook. Owners have remained adamant that rates should not reduce on the back of a very busy first decade of November and expected increase in earning capacities within the last quarter of 2013. Chinese charterers have continued to secure Chinese tonnage against their programme within the second decade and are now looking towards covering their 20-30 November stems with little influence in market levels. Mid week, the introduction of three cargoes to the west, off end November dates, was the catalyst for owners to apply further pressure and try to increase from last done by Exxon. This was achieved by a pair of fixtures, setting a precedent at 2.5 Worldscale points over last done, causing a rise in owners confidence and ammunition to push rates up for eastern destinations. As the week closes we have seen relatively few fixtures out to the east, however rates have increased up to 47.5, with firming sentiment. With adequate tonnage still available at the Fujairah anchorage, charterers continue to drip feed cargoes into the market, however as sentiment remains bullish owners are seizing one of the very few opportunities this year to increase earnings and break the elusive $30,000/day earnings. The momentum remains in the favour of the owners at present.
The West African market was strengthened in line with the Arabian Gulf and hence we have seen stronger fixtures as the week progressed. The week started on a relaxed footing with West Africa/China holding at about 260 at 43.5 but as the owners piled on the pressure in the Arabian Gulf, their aspirations for the rates in the area also increased in line with the volume of cargoes quoting in the AG. With ships in the Atlantic few and far between, its the ballasters from the eastern hemisphere which have helped to drive the market up. Over the course of the week, 260 at 45 was fixed followed by 50 and then 52.5 being reported on subjects for early December loading to China. Brazilian charterers fixed a VLCC for Brazil/China at 46 but had to replace the vessel as the unit was delayed in discharge and when they replaced the charterers had to pay an extra 2.75 points. The Caribbean remains active with owners managing to push rates up above the last done of $4.1m for Caribbean/Singapore, which would rate China at $5.0m. Having seen the strength in the Atlantic, this could reach $4.25m and $5.25m before long.
The 30-day availability shows 63 VLCCs arriving at Fujairah, of which three are above 15 years old, this compares to 53 last week. This is quite a significant increase but we are yet to see how many of those will be called upon to perform COA deals with their domestic friends. The market sentiment remains firm and it will take a quiet period to calm rates down, having said that we believe that with 103 fixtures reported, we estimate about 35-40 cargoes to come.
The bunker price is $622/tonne, up $6/tonne from last week.
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