Quiet business forces Mid-East rates downward

PUBLISHED : Monday, 21 March, 1994, 12:00am
UPDATED : Monday, 21 March, 1994, 12:00am

THE volume of business out of the Middle East Gulf last week remained extremely disappointing, with fixings diminishing.

Of the 14 which have been reported, 12 were of very large crude carriers (VLCCs) and two of ultra-large crude carriers (ULCCs), of which nine are destined for the Far East and the Red Sea and five to the West, totalling 3.7 million tonnes of cargo moved.

The build-up of a substantial number of early ships, combined with a downturn in the volume of business quoted, has resulted in rates showing a slightly softer tendency.

The rate for a two-million barrel VLCC from this area to the UK-Continent is about Worldscale (WS) 36, with the option of the US Gulf at 2.5 points less.

Rates for the slightly smaller VLCC to the East and the Red Sea would range between WS 37.5 for Korea to WS 41.5 for Japan, and between those rates for the Red Sea.

One ULCC was reported fixed at WS 31 to the US Gulf.

The current availability between now and April 17 is 19 ULCCs and 65 VLCCs, totalling about 24 million deadweight tonnes (dwt).

Overall, there has been business available for the Aframax and Suezmax vessels operating out of the Middle East Gulf, basically for Eastern destinations.

As high as WS 142.5 has been paid for a vessel of 78,000 tonnes for the restricted loading at Bandar Mahshahr for discharge at Singapore, whereas the slightly larger units destined for Australia have closed for about around WS 90 to WS 92.5.

One leading charterer has been responsible for the majority of VLCC-size vessels fixed out of West Africa this week, having closed three cargoes off the market.

It is reported that the rates paid show a marginal improvement at WS 50 for the US Gulf, with the option of the US Atlantic coast at WS 52.5 and UK-Continent-Mediterranean at WS 55.

The rate for the full one-million barrel ship fixing out of this area indicates that a level of around WS 72.5 is obtainable for the US Gulf, with the normal premium applying for discharge in Europe.

Owners operating out of the Mediterranean found it extremely difficult to hold on to the gains they made last week with the rate for the 80,000 tonner in the cross-Med trade hovering around WS 80.

The million-barrel tanker in the same trade has been closing at WS 70, with the normal variations depending upon discharge port.

A reasonable amount of business has been concluded out of the Caribbean and east-coast Mexico loading ports.

The last fixtures indicate that a 73,000 tonner loading in east coast Mexico to the US Gulf obtained WS 112 while WS 115 was paid for a slightly smaller vessel discharging in the US Atlantic coast.

A transatlantic movement on a 70,000 tonner obtained WS 80.

There has been an average volume of business out of the UK-Continent-North Sea this week, using vessels of all sizes.

Fixtures concluded indicate that the market for the three sizes is WS 102.5 for the 80,000-tonne inter-UK-Continent movement; WS 72.5 for a 130,000 tonner fixed North Sea to the US Gulf; and a 260,000 tonner loading in the same area in early April for east-coast Canada obtained WS 52.5.

Report supplied by London ship broker E.A. Gibson.