It’s tanker time! Market report Nov 22By james tweed • Nov 24th, 2013 • Category: Tankers
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The leading lights of the VLCC market returned to their desks this week, and a hiatus returned to the Arabian Gulf market with fresh cargoes being quoted and offers taken down. There was a lot of activity on the AG/West route in particular, and as the dates moved forward into the 2nd decade of December, the rates progressed from 37.5 AG/US Gulf to 39, boosting owners’ earnings. In contrast, the activity on the AG/East route was steady, but rates didn’t move, instead they consolidated at last done levels of 270 at 65. There was also some significant business done from the AG to the US West Coast at 280 at 55, proving that those rates tend to disconnect from either AG/East and AG/West and tend to settle somewhere in the middle, giving the option to the owner to ballast to West Africa and a decent demurrage bill. Finally, the owners are seeing some return on their VLCC investments, however it’s been a very long year, and they will need to work hard to maintain rates rather than give away a point here and there, or we’ll be back to sub CAPEX before you know it.
The West African market reflects the strength in the AG and has been relatively untested for most of the week. That said, there are reports that 260 at 62 was done for West Africa/China and that’s a significant jump from the last done levels.
The Caribbean market is once again strong as vessels in the area are tempted to ballast to West Africa to maximise earnings, thus freights have been pushed to $5.9m to $6m levels off early December for the Caribbean to Singapore run.
The 30 day availability shows 61 VLCCs of which nine are over 15 years old compared to 53 of last week. We have now reached about 45 fixtures for the first decade and about half way through the second decade, so in theory there is more than enough tonnage to cover the remaining stems for the month, but the momentum seems to be with the owners for the moment.
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