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By • Feb 14th, 2014 • Category: Tankers

The Coracle tanker market podcast for Feb 14, 2014 in association with Braemar-Seascope

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Thanks for downloading the VLCC Tanker Market report podcast from and Braemar Seascope for February 7th 2014.

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The VLCC market demonstrated more strength this week because, on the back of continued resistance from owners, charterers were forced into paying rates at 270 at 60, up from 50 the week before. The continued flow of cargoes into the market for the last decade of February has meant that owners with vessels in position have received a confidence boost, after being approached by cargo after cargo on their dates. For the moment, freight rates seem to have stabilised around 270 at 60 and owners are not pushing for more as they capitalise on good earnings. As the week nears the end a fixture is reportedly on subs 270 at 67.5 for AG/ Singapore as a replacement, and while this is the exception rather than the rule, it does prove there is firm foundation to the market. Owners may feel that it is better to have a stable but strong market rather than the roller-coaster ride of higher rates followed by a crash and multiple deal failure while freight rates drop, as was seen only a month earlier. Life is also easier for charterers in a steady market because in a falling market, the temptation for the fixture to be failed on management subjects is often too great.

West Africa has been busy with charterers moving into the back end of the second decade of March for West Africa/China and rates moved up to 260 at 60, reflecting the rise in AG rates. These are the kind of deals owners get very excited about because West Africa/East at 60 gives strong earnings for a 70-day round trip, going some way to securing a financially comfortable year.
Fuel oil arbitrage movements seem to be working better on the smaller ships as the larger rates wanted by VLCC owners aren’t sufficient to support the trade.

The 30 day availability index shows 60 VLCCs arriving at Fujairah, of which four are over 15 years old, compared to 58 last week. With approximately 128 cargoes now covered for February, including 47 fixtures in the final eight days of the month, it’s this flow of cargoes that has kept rates buoyant.

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