Orders run dry in Middle East
OWNERS of very large crude carriers and ultra-large crude carriers (VLCCs and ULCCs) took a battering in the Middle East last week, with 30 million dead weight tonnes (DWT) of capacity left idle.
Only eight vessels of 2.25 million tonnes were absorbed from the Gulf, with six destined for the East and two to the West.
The downturn in business did not led to lower rates, with levels staying close to those previously reported. The last reported fixture of a VLCC to the West was WS 47.5 and WS 42.5 for a ULCC. Rates to the East, particularly where older vessels were acceptable, were also WS 47.5. However, the superiority of vessels required by Japanese charterers enabled owners to obtain WS 53.5.
There remained a good utilisation of Aframax size vessels out of this area, with the majority heading east, where tonnage discharging in Singapore was registering WS 105 with a slight premium payable for discharging in Australia.
Owners had another disappointing week in the West African market, where activity remained restricted to the one-million barrel size vessel. The last reported fixture of such size vessel to the US Gulf at WS 75 with the normal 2.5 Worldscale-point premium for USAC and a further 2.5 Worldscale points for the European option. Less modern tonnage had been forced to discount these rates.
The limited opportunity for all sizes of crude oil vessels operating in the Mediterranean continued to cause problems for owners operating in this area, where rates remained static at 95/97.5 for the normal 80,000-tonne standard vessel in the cross-Med trades. Charterers found little difficulty in covering larger quantities with mid-1970's built vessels willing to accept WS 70 for cargoes of 120,000 to 125,000 tonnes loading from Sidi Kerir. VLCC interest was limited to one fixture of 260,000 tonnes to northwest Europe of about WS 60.
Owners of the crude oil carriers operating in the Caribbean trades fared well in the beginning of the week, with anticipation of further gains which, unfortunately, were not fulfilled as quieter conditions at the close forced rates back to the WS 145 to WS 150 level for an Aframax for discharging both in the US Gulf and USAC. The larger size million-barrel unit found the conditions extremely unfriendly, with no fixtures being reported.
There had been sufficient varied interest emanating out of the North Sea enabling owners to maintain previous levels of about WS 110 for the standard cross-North Sea voyage with cargoes of 80,000 tonnes. Other activity included a 130,000-tonner to the USAC at WS 78.5 but once again VLCC interest was restricted to one fixture at the uncharged rate of WS 52.5 to the US Gulf.
Probably the most interesting report was the contract for 14 voyages from Venezuela to Denmark of 100,000-tonne cargoes of orimulsion at a reported level of US$6.50 per MT.