Fixings increase fails to stimulate rate improvement

LAST week saw 20 very large crude carriers (VLCCs) and ultra-large crude carriers) ULCCs fixed out of the Middle East Gulf, more than 50 per cent up on than the previous week.

A continuation of that fixing rate over the next few weeks would absorb all available tonnage trading on the spot market, particularly over the next month with 73 units available, totalling slightly over 20 million tonnes.

Despite the activity, rates have not yet moved and VLCCs continue to be fixed from the Middle East to the US Gulf at slightly over Worldscale (WS) 30, and around WS 32.5 for discharge in Europe.

One oil company re-let, however, obtained WS 34 for a voyage to Europe from its fellow London major oil company.

Another fixture of note was of the world's largest vessel being fixed for a cargo of 550,000 tonnes to the Red Sea at WS 28.

Rates for modern Aframaxes saw some improvement last week, moving into the range of WS 110 to WS 115 for 80,000 tonnes to the East.

The West African market staged a small rally after two disappointing weeks. After dropping to WS 60 for cargoes to the US Gulf, vessels of 130,000 tonnes have managed WS 70 for discharge on the US Atlantic coast.

Of the VLCCs reported fixed, one was a major oil company vessel which has fixed to India at US$50,000 a day, - a good price, considering its next stop will be the breaker's yard.

On a more conventional note, one two-million barrel ship was fixed to the US Gulf at WS 41.25.

The Mediterranean market has had little change in trade, with Aframax tonnage holding its previous level of WS 100 for cross-Mediterranean voyages and WS 95 for Europe.

Million-barrel tonnage had a more mixed week and, depending on destination and the quality of the units involved, rates varied between WS 67.5 and WS 75, the latter being for a voyage to Italy.

The North Sea market, however, has been more subdued and, apart from the one vessel of 80,000 tonnes which obtained WS 105 for a cross-North Sea voyage, rates remain unchanged from last week with WS 95 being the rate for short voyages and WS 90 the last reported for a voyage to the US Gulf.

In the Middle East Gulf, enquiry began slowly since it appears that a number of Japanese importers were negotiating supplies for the second half of the year.

Vessels in early positions, however, have not fared so well and 50,000 tonnes loading in the Red Sea for discharge Singapore paid only WS 150.

Enquiry in the Mediterranean last week was dominated by traders endeavouring to move large stems of gasoil to the East Rates varied with some dirty tonnage moving 60,000-tonne lots to Singapore at $800,000 whereas conventional clean tonnage obtained $1.15 million for the same employment.

Rates for smaller units of 30,000 tonnes of gasoil slipped slightly to around WS 170, as did rates to the East.

In the Caribbean market, rates for product carriers have been unaffected by the activities and fortunes of the crude oil fleet, with tonnage lucky if able to repeat the previous week's rates.

It would not have been unrealistic to expect the northwest European market to show signs of rate increases because of the lack of clean tonnage for May loading, but enquiry has been inconsistent and rates have only held steady.

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