IT is surprising that with nearly seven million tonnes of tonnage being fixed last week, rate levels have not shown a significant improvement. Analysis of the total of 55 very large crude carrier (VLCC) and ultra-large crude carrier (ULCC) units fixed during the past two weeks and compare this with the average of 75 units fixed per month during past year, makes it even more surprising. However, on reflection, it is probably a much more healthy sign for a sustained recovery that any improvement in rates is gradual. Rate levels from the Middle East Gulf for both the US Gulf and UK-Continent for VLCC fixtures have seen an improvement of 2.5 points and now stand around Worldscale (WS) 35 and WS 37.5 respectively. Rates to Japan have shown little change, remaining in the low WS 40's for 250,000 tonnes of cargo, with slightly less being paid to South Korea where the quality and age constraints are not so severe. Aframax units also have benefited somewhat from an improved market, with the last fixture reported of an 80,000 tonner to Singapore at WS 99. The increase in million-barrel activity which started last week in West Africa has continued throughout this week. Tonnage can now expect to obtain rates of WS 72.5 for voyages to the US Gulf and the latest fixture of this type agreed further options of WS 75 for discharge on the US Atlantic cost and WS 77.5 for discharge UK-Continent. In contrast with the previous week, however, VLCC activity was much less with only two vessels being reported - one of 260,000 tonnes to South Korea at US$1.1 million to a London major and another of similar size to Europe at WS 45, but this subsequently failed its cargo stem. Aframax rate levels in the Mediterranean stand around WS 100. The Caribbean market, which had shown an improvement, appeared to have levelled out last week with the latest fixtures reported varying between WS 112.5 for a cargo of 75,000 tonnes, loading in the Caribbean for the US Gulf, and another cargo of 72,000 tonnes, loading in the Bahamas for the US, at WS 147.5. Apart from a couple of exceptions, there has been sufficient action in most product areas to sustain the previous weeks' rate levels - the exceptions being in the Middle East Gulf where increased demand has caused rates to firm and, in Northwest Europe where the opposite has occurred. Large vessels in the Middle East Gulf have had mixed fortunes and vessels loading after March 20 have seen increased demand, with rate levels improving 10 points to WS 155 and WS 157.5 for cargoes of 55,000 tonnes to Japan. Earlier tonnage, however, has fared less successfully and, in order to avoid waiting time, has been showing signs of discounting those levels. Smaller units in the medium range have not had such restrictions placed on their dates and, with demand being at a more level pace, rates have improved slightly. The rate for a 30,000-tonne cargo to India stands at between WS 200 and WS 210. As has been the case in previous weeks, charterers seeking naphtha-suitable and oil-company-approved tonnage in the Mediterranean are those who have experienced the most difficulty in covering their requirements. Rates of around WS 230 are being paid for 25,000 tonnes of naphtha cargo, whether destined to the Mediterranean or the UK-Continent, and with enquiry out-placing availability, these rates could improve even further this week. Gasoil has been moving from the Mediterranean to the Far East and typical rates to Singapore and Japan have been US$1.1 million and $1.3 million lumpsum for 55,000 tonnes of cargo. Report supplied by London ship broker E.A. Gibson.
