VLCC rates show a small improvement
DESPITE an active very large crude carrier (VLCC) market from the Middle East Gulf with some 32 units totalling about 8.2 million deadweight tonnes (dwt) being fixed, rates showed only a small improvement towards the end of the week.
Owners with certificate of responsibility (COFR) tonnage were particularly disappointed as there was no inquiry for United States discharge.
VLCC rates to north-west Europe eventually crept up to worldscale (WS) 47.5, while the Conference level of WS 52.5 to Japan was maintained.
Voyages to other Far East destinations and to the Red Sea were fixed at around WS 47.5.
Aframax inquiry remained thin with 80,000 tonnes being fixed from the Middle East Gulf to the Far East at WS 115, with a similar size to Australia obtaining a six-point premium.
The shortage of COFR tonnage was most acutely reflected in the West African market where such a unit obtained WS 128.75 for 130,000 tonnes to the US, while similar voyages to Europe were fixed at around WS 92.5.
As very little million-barrel tonnage was available to meet US requirements, charterers turned to VLCCs in order to combine cargoes.
This resulted in rates of WS 70 being paid for 260,000 tonnes to the US Gulf, representing 7.5 points increase over last week.
In the Mediterranean, the Aframax market appeared to have stabilised at about WS 115 for cross-Med voyages.
Activity for million-barrel vessels was concentrated from the Russian Black Sea, with rates between WS 87.5 and WS 90 being paid for Britain-Continent and Mediterranean destinations.
The decline of the Caribbean market continued, and by the end of the week the rate for 80,000 tonnes to the US Gulf had slipped to WS 130.
The only Aframax vessel fixed transAtlantic was at the surprising high rate of WS 117.5 for 80,000 tonnes to Spain, whereas a cargo of 130,000 tonnes was fixed from East Coast Mexico to Spain at WS 65.
The North Sea market was weaker with 80,000 tonners generally obtaining between WS 110 and WS 112.5 to the UK-Continent.
There was no demand for this size tonnage for other destinations. However, there was some interest in VLCCs for transatlantic voyages where a rate of WS 67.5 to East Coast Canada was established.
The only million-barrel fixture concluded was at WS 92.5 for the US Gulf on the basis that if owners obtained COFR, this would then be for the charterer's account.
There has been more activity on the period market with one American charterer fixing three Aframax vessels for 12 months time-charter at around US$16,000 per day with COFR for Charterer's account, and a major oil company extended a 1994-built Aframax vessel for six months trading in the Far East at $15,000 per day.
The products market witnessed another active week with owners in most loading areas being able to command freight in excess of that obtainable last week, both to East and west of Suez.
The absence of inquiry to the United States had not resulted in a collapse of the Britain-Continent market as a number of charterers had been actively fixing tonnage from the Continent to West Africa.
While the ullage problems in India continue and look like remaining unresolved in the short term, freight appears to have levelled out.