Disappointment abounds for VLCC owners. March 21By james tweed • Mar 21st, 2014 • Category: Tankers
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A cargo from an oil-trading company that was holding to fix at 40 from the AG last week rolled over into this week with 12 offers off the very end March for an Eastern destination. After a standoff last week, 41 was agreed for a voyage into Taiwan. The fixture acted as a catalyst and others started quoting their final March and early April liftings. South Korean re-lets continue to emerge and are happy to quietly shave a few points from last done levels off-market in order to secure employment. As expected and is so often the case, a well-timed quote appeared from a Korean charterer, and amid the usual flurry of offers, and gunning for a competitive rate, their first counter was given 265 at 33, to the disappointment of many owners. The cargo was eventually covered at 274 at 36.25, which is the lowest rate achieved so far this year for an Eastern destination. No doubt charterers will now use this newly established rate to try to maintain pressure on the owners and cover at similar levels.
For cargoes AG/West, apart from fixtures with several options, we have seen little this week apart from 28.5 being paid AG/US Gulf and an AG/Brazil currently being traded that should pay a slight premium in comparison to US Gulf voyages.
The West African market remained less active than the Arabian Gulf much like last week, with Chinese charterers covering only two cargoes at 42.75 and 42.5. West African rates going long East seem to have steadied at 42.5 levels for the moment. There was no fresh activity for West Africa/US Gulf or UKC-Med which kept rates for these voyages untested.
Indian charterers had a shorter week owing to a bank holiday, but IOC covered two of their second decade April requirements out of the region. IOC first came into the market off 17-18 April dates and received a healthy response to their enquiry. Charterers took a ship coming out of Durban at $3.45m, in line with prevailing market levels. They subsequently came in again for a laycan off 10 April for which the tonnage list was much shorter, but they still managed to repeat last done.
The Caribbean market has been very slow this week but we expect activity to pick up. For some, the nervous wait has been too much and trading barrels loading via STS in the US Gulf fixed at a weaker level of $3.5m to Singapore. Saving in port costs (being an STS load) and in slight compensation for having no ballast, but it’s still another drop in rates and doubtless others will look at this and adjust their ideas when covering programs. It’s a similar story in the UKContinent where we see softer levels being reported from Rotterdam and the UK Cont.
The 30 day availability index shows a possible 100-plus VLCCs arriving at Fujairah, of which four are over 15 years. For the month of March we counted 110 fixtures from the AG with an approximate 20 ship overhang into April. So far, for the first decade we have 14 fixtures concluded and it will take a major increase in volume to correct the shift now being seen in supply.
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