Market report podcast for the TANKER sector for Nov 29By james tweed • Nov 29th, 2013 • Category: Tankers
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Thanks for downloading the VLCC Tanker Market report podcast from myCoracle.com and Braemar Seascope for November 29th 2013.
Arguably the most important developments this week were in Geneva for the most significant agreement between the USA, the E.U. and the Iranian government since the sanctions began. It sets out a framework for a future where the sanctions can be lifted and allows the Iranians to once again freely trade their oil and oil tanker fleets. It remains to be seen how this will affect the market, however one feels that there will be a protracted negotiation stage before there are significant changes to the sanctions.
Meanwhile, over the past week the VLCC market has remained firm but steady. The market has peaked, but rather than coming off, charterers have been picking off less approved ships, ships coming from dry-dock and owners who have decided that the low 60’s is acceptable, rather than push for more. The daily earnings are very difficult to turn down when you have had a summer of sub-operating costs and the bank manager is pushing you for cash-flow. An average consuming vessel can earn $50,000/day at the moment, and that is a good return for a 40 day round trip. From the Caribbean the prevailing rates give a $70,000/day trip back to China followed by Fujariah, so an excellent return if you are fortunate enough to be in position. VLCC owners and operators must fight to maintain these rates, and resist the temptation to give up points too easily, because once the rot sets in the rates can quickly be eroded back to the poor levels we saw over the summer. That said, this market is built on firm foundations and owners must make some healthy returns over the winter season to try to salvage an otherwise poor year.
West Africa has been more subdued for VLCC fixtures with 260 at 62.5 being the last reported, loading at the end of December. The market in the Atlantic is firm. The Indian based charterers had a quieter week and we are assessing the rates at the same levels as last week.
The 30 day availability shows 50 VLCCs of which five are over 15 years old compared to the 61 of last week. We have now reached about 33 fixtures for the second decade and nine, mostly western destined cargoes, for the final decade. Counting just beyond the 30 days, takes us to the end of the calendar month and shows 60 VLCC’s marketed as available against an expected 40 more cargoes for the month, hence, as a charterer, you might want to fix sooner rather than later, although we do expect more far eastern tonnage to add to the list over the next week.
Thanks for listening