VLCC rates slide back into doldrums

PUBLISHED : Monday, 10 May, 1993, 12:00am
UPDATED : Monday, 10 May, 1993, 12:00am

LAST week saw a down turn in demand with only 11 vessels of three million tonnes utilised, and the market returning to around WS (Worldscale) 40.

However, the market level for a very large crude carrier (VLCC) to the West was hard to gauge. Few fixtures have been reported in this area other than a 230,000 tonner to Aruba at WS 40.

The level applying for VLCCs has been around WS 40 to WS 42.5. Between now and the end of the first week of June, 20 million tonnes was expected to become available, made up of 77 VLCCs and ultra-large crude carriers (ULCCS).

Aframax tanker owners also again have found the going tough, with rates hovering around WS 90 for voyages to the East.

Although there has been an improvement in the volume of trade concluded out of West Africa, rates have regained only a small percentage of the previous week's losses and now stand at WS 62.5 for million-barrel size ships to the US Gulf.

The Mediterranean has again shown that there is little underlying strength, with the 80,000-tonne size closing around WS 95 to WS 100 for voyages both within the Mediterranean to the UK-Continent, while million-barrel vessels operating in the same trades have fixed at WS 70 to WS 72.5.

The 70,000 to 80,000 tonne vessels operating out of the Caribbean and east coast Mexico have suffered a further erosion in rate levels to where the norm for such ships operating to the US Gulf are closing at WS 120, with a similar size vessel taking a cargo from the Caribbean to Sweden at WS 95.

Black Oil tonnage operating out of the North Sea has not seen any encouraging signs, with the rate for the 80,000 tonner for inter-European voyages standing at WS 97.5.

In spite of another short working week, there was considerable interest generated in moving clean products from the West into the East.

Unfortunately, however, only a handful of the fixtures made were eventually confirmed. There was also an increased activity in moving unleaded motor fuel from Northwest Europe to the US which enabled owners to obtain far more acceptable rate levels.

Far East charterers continued their quest for LR-size clean units able to give early June liftings in the Middle East, culminating in a new high of WS 129 for a 55,000-tonne movement to Japan.

Smaller vessels found themselves competing with unwanted LPG tonnage, resulting in rates ranging between WS 110 and WS 120 for discharging in South Korea.

MR-size vessels however, found rates continued to slip to where a 30,000 tonner closed to India at WS 135.

Out of the Mediterranean, rates showed a small depreciation this week, with a 25,000 tonne movement of gasoil fixing at WS 155 for a cross-Med movement, with the option of UK-Continent at 10 points more, while naphtha cargoes were still able to command an extra 10 points on these movements.

Trading cargoes for movements into West Africa were at WS 165 for a 30,000-ton unleaded, and WS 175 for leaded.