Heavy VLCC and ULCC fixings support rate levels
HEAVY fixings in the Middle East Gulf of very large crude carriers (VLCCs) and ultra-large crude carriers (ULCCs) in recent weeks has been sufficient to keep the market buoyant.
Even though last week's figures show that only 4.5 million tonnes were fixed, compared with seven million the previous week, scarcity of quality tonnage in earlier positions has allowed owners to maintain recent rate gains.
Of the four ULCCs which were fixed during the week, three were destined to the Red Sea at between Worldscale (WS) 31 and WS 31.5, and older and modern VLCCs for similar destination obtained WS 34 and WS 37.5 respectively.
Rate levels for two-million barrel ships to the West now stand at WS 36 to the US Gulf and WS 38.5 to the UK-Continent.
Enquiry to Japan has been scarce and only one fixture of 250,000 tonner was reported at WS 41.5, with rates to South Korea about four points less.
Aframax enquiry also was down on previous weeks, but again shortage of vessels allowed owners to maintain levels, with the last fixture reported of an 80,000 tonner to the Far East at WS 100.
Higher rates have been obtained, however, for loading out of ports with length restrictions and the latest fixture reported for similar destination with this restriction was at WS 130 for 73,000 tonnes of cargo.
In the West African market, little change in rate levels has occurred and the rate for one million barrels to the US Gulf still at WS 72.5, with 2.5 points more paid for US Atlantic coast discharge and five points for UK-Continent.
Only one VLCC was reported fixed from the area, that of a 260,000 tonner to the UK-Continent at WS 48.
Probably the most significant factor on the product market last week was the number of fixtures concluded, compared with those which were negotiated but failed ''subjects''.
This has been disheartening for owners, but they still have been able to maintain previous levels in most areas.
For owners of large-range tonnage in the Middle East Gulf, the encouraging signs that were apparent last week suffered a slight setback when LPG tonnage elected to wait nearly a month for oil cargoes.
Furthermore, to secure these cargoes, they were forced to accept discounted rates of WS 154 on 50,000 tonnes.
Conventional tonnage, however, has gained a five-point premium.
Medium-range tonnage fared less well, with rates having fallen 10 points.
Enquiry in the Mediterranean has been sufficient to hold rate levels steady even though numerous traders have failed tonnage which they had fixed on ''subjects'' for cargoes of unleaded petrol to the US.
Although the success rate of concluded fixtures has been less than 50 per cent, rates of WS 250 are still being paid for 28,000 tonnes of cargo in this trade.
Naphtha stems also have been fixed and rates remain around WS 230 for 25,000 tonnes to the UK-Continent or Mediterranean. Report supplied by London ship broker E.A. Gibson.