Volume rises as owners gain ground on losses
JUST to prove its perversity, not only did the tanker market accomplish an increased volume of business last week, it also arrested the decline in rates, with owners regaining some of the ground they had lost previously.
About 30 VLCCs and ULCCs were fixed, of which over half were to Eastern destinations.
With such a large draw-down on tonnage, there are now only about 60 vessels of 16 million deadweight tonnes (dwt) remaining until the end of March and, with few good modern ships in the early positions, rates could show further appreciation.
The last recorded rate for a VLCC to the West stands at Worldscale 43.5, with the Red Sea option at WS 47.5.
A small ULCC achieved WS 42.5 for the UK-continent, with the option of the US Gulf at WS 40, and a 350,000-tonner closed to the Gulf at WS 37.5.
Rates for voyages to the East also showed a modest improvement with as high as WS 50.5 being registered to South Korea, while Japan held on at WS 51.
Aframax-size vessels operating out of this area to the East were less fortunate last week, having to accept reduced levels to obtain employment, with rates of WS 115 being accepted to Singapore, while Mombasa could only muster WS 105.
The majority of business concluded out of West Africa was for million-barrel size vessels, and demand was sufficient to allow shipowners to improve on the rates they were forced to accept the previous week.
The rate to the US Gulf stands at WS 80, with the option of the USAC at another 2.5 points. A voyage to Taiwan on a similar size vessel closed at US$1.21 million.
Owners of Aframax vessels operating out of the Mediterranean had little enjoyment last week, as once again rates stuck at the extremely depressed levels of between WS 95 and WS 100 for cross-Med movements.
With very little else on offer, owners do not envisage any immediate improvements.
A good volume of business was transacted out of the Caribbean and East Coast Mexico in the middle of the week with numerous fixtures being concluded, encompassing all the normal sizes.
This resulted in rates showing a discernible improvement to the point where 75,000-80,000 tonne vessels in Caribbean-US Gulf trade were obtaining about WS 150 with similar sizes from East Coast Mexico to the same destination closing at WS 105.
The only interesting business out of this area has been a transatlantic fixture for a 130,000-tonne vessel at WS 67.5.
Rate levels for the average 80,000 tonner operating in inter-European trades fell to about WS 97.5-WS 100 with a VLCC closing from the North Sea to the US Gulf at WS 55. A million-barrel tanker obtained WS 72.5 for a voyage from Mongstad to the US Gulf.
In spite of expectations running high for a more active and clean market after the IP Conference, most areas struggled to raise their momentum.
However, freight levels have maintained a steady pattern even in those areas where increased activity enabled Charterers to utilise the excess tonnage available.
Report prepared by E A Gibson Shipbrokers of London