Review of a week when the VLCC market sprang back to life.By james tweed • Feb 10th, 2014 • Category: Tankers
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The VLCC market sprung back to life this week as charterers, sniffing a good deal, all seemed to enter the market looking for VLCCs at the same time and suddenly the fortunes of owners were turned around. Last week ended with freight rates for AG/ East heading down through the 270 at 45 and 280 at 28 for AG/USG. This seemed to have been the turning point and since then, the volume of fixing increased. Although it was Chinese New Year holiday week, there have been multiple China and Korea destined cargoes. In the face of strong resistance, owners only managed to raise rates from 270 at 44 to 48.5 over the course of about ten fixtures. On the way down, the reverse was managed in one fixture, proving once again how easy it is for charterers to knock the market down in contrast to how hard owners have to struggle to pick the market up.
West Africa has also been busier this week, with charterers spotting weakness in the AG and deciding now was a good time to cover out until mid-March stem dates. As you’d expect, rates rose.
The 30 day availability index shows 58 VLCCs arriving at Fujairah, of which nine are over 15 years old, compared to 62 last week. With approximately 115 cargoes now covered for February we are now above 30 cargoes counted for the last decade, with only western destined cargoes working March loading dates.
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