VLCC owners covering operating costs. Woot woot!By james tweed • Jun 20th, 2014 • Category: Tankers
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A concerted effort from owners, coupled with a recent large volume of fixtures, has managed to keep freight rates at levels which allow vessel operating costs to be covered by the freight. It usually takes a momentous effort to move Arabian Gulf freight rates into positive earnings and owners must be careful not to give away points too cheaply when the market quietens down. A more stable market usually results from a more gradual increase in freight rates, so if owners keep the pressure on and push point by point rather than large jumps, hopefully the market might last more than just a week or so. Levels are 270 at 38.5 for AG/China and 280 at 24 for AG/West.
As has become customary, West Africa/East has improved in parallel with the Arabian Gulf, and slowly but surely rates have improved to 260 at 41with unconfirmed reports that 42 could be on subs for China. The softening Suezmax market has meant that most westbound cargoes will be covered on the smaller vessels. From the Indian charterers this week, two cargoes were worked out of West Africa. With more activity to be seen from charterers’ July programme out of the region, we are assessing voyages to West Coast India at $3.4 million and $2.7 million for the East coast.
The 30 day availability index shows 91 VLCC’s arriving at Fujairah, of which nine are over 15 years old, compared to 81 last week. The month of June was a shorter month as we predicted with only 110 fixtures reported. We suspect July will be similar and we have reported already ten cargoes for the month.
Bunkers were up $12 this week to $620.
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