Growing import demand to lift tanker freight rates
Freight rates for coastal tankers within Asia were poised to rise between 10 per cent and 12 per cent next month, supported by growing import demand from China and Indonesia, sources said yesterday.
Rates for coastal tankers - typically 10,000 to 20,000 tonnes each and used by traders and refiners to ship small spot parcels - moving between Singapore and north China were valued about US$390,000 yesterday, up about 12 per cent from levels a month ago.
'These smaller coastal tankers are more in demand because in a volatile oil market where anything can happen overnight, moving smaller cargo lots and trading in smaller lots makes better sense,' a shipbroker said.
The steady rise in demand for coastal tankers recently has squeezed medium-term tonnage availability in the region and lifted spot jet fuel premiums which distillate traders now value at US$3 to US$3.50 a barrel for cost-and-freight China, up from the US$1.80 to US$2 a barrel a month ago.
China, the world's No2 oil consumer, was expected to increase its jet fuel imports this year by about 50 per cent from a year ago to about 4.8 million tonnes, with half of that volume still to buy, a Chinese industry official said last week.
'Freight has been a major factor in spot jet fuel premiums and is likely to continue to have an impact on either spot or regular monthly imports,' said one distillates trader.
Chinese jet fuel imports for this month have hit about 452,000 tonnes, up 11.6 per cent from last month and about 60 per cent higher than last year's monthly average.