Tanker (VLCC) report for week ending Mar 14By james tweed • Mar 17th, 2014 • Category: Tankers
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Now the markets and the week started off with rates having slipped below the 270 at 50 mark for AG/East and stabilising around 49 for AG/China, although owners’ confidence was waning and charterers knew that the line of resistance was about to give. Those that cast their eye down the tonnage list might have noticed a couple of weak links – namely ships in a special situation that were willing to discount the prevailing market. The Nucleus was lacking a Sire report, having been in lay-up for about 12 months so it would have to offer a discount, while some Greek owners made it known they would offer a discount for AG/Korea cargoes on their two vessels in position. S-Oil entered the market for 270,000 tonnes off 21-23/March, Ras Tanura/Onsan. S-Oil quickly received 12 offers, and having broken the will of the owners, they managed to squeeze the rate down to 274 at 40.25 and follow that with another 277 at 39.75. It was a masterful piece of chartering, a few points lower than even the most charterer minded broker might have predicted. Rates for AG/China have since recovered to about 270 at 42.5 but this includes heavy commissions and 120 hours laytime. Owners are willing less for a straight South Korea voyage.
It was a similar story for AG/West, KPC being the charterer to quote the market and manage to push rates down to 280 at 29 before Irving delivered the coup de grace at 280 at 28 via the Suez for Ras Tanura to Canaport. Levels for AG/US Gulf via the Cape of Good Hope are 280 at 29.5 with 28 being repeated for the US Gulf via the Suez. Rates have since recovered somewhat, with charterers that required multi-option cargoes having to pay a few points premium for most options, but sentiment is by no means firm.
West Africa has been less busy than the Arabian Gulf but has suffered the same crisis of confidence for ship owners, hence rates have slipped to 260 at 42.5 for West Africa/China. Rates for West Africa to the US Gulf or UK Cont-Med have not been tested since the Suezmax market has been weak enough for the smaller ships to carry all the volume.
The Caribbean market has continued to soften this week as vessels compete for employment. With the Chinese taking a break from the market, IOC did come in the market for their first requirement out of east coast Mexico this year and received a healthy response to their enquiry. Charterers took a re-let at $3.6m, about $200,000k lower than last done, making rates for Singapore sub $4million.
The 30 day availability index shows 71 VLCCs arriving at Fujairah, of which four are over 15 years old compared to last weeks total of 76 ships. So far for the month of March we have counted about 100 cargoes fixed from the AG. March is historically a shorter month than average, so we predict only between five and ten more cargoes to fix, making a total of about 105-110 cargoes. With 35 ships which can still make end-March cancelling dates, we expect a hangover of about 25-30 ships. It will take a major increase in the volume of fixings to start to move freight rates back in an upwards direction.
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