Around 47 MidEast charters fixed for July loading so far; older tonnage and new vessels a drag on freight rates.
Freight rates for very large crude carriers (VLCCs) are set to nudge higher next week after moving above nine-month lows on increased charters this week, ship brokers said on Friday, although gains will be capped by ample tanker availability.
“The market is still rubbish, but it has turned,” a Singapore-based supertanker broker said on Friday.
“There is plenty of fixing to come in the rest of the month, but there are still plenty of ships available,” the broker said.
Around 47 VLCC charters have been concluded to load Middle East crude in the first 20 days of July compared with a monthly average this year of about 120-135, the broker said.
“I doubt we see rates climb very high. The tonnage list is still well supplied and there are still some newbuilds and ships direct from drydock to fix,” a European supertanker shipbroker said on Friday.
Average VLCC charter rates from the Middle East to Asia were around 47-48 on the Worldscale measure, equivalent to daily earnings of around $27,800, the Singapore shipbroker said.
But charter rates for older tonnage or vessels straight from shipbuilding or ship repair docks are around W39-40 because owners offer a discount as they seek urgent employment rather than have ships idle.
“The market is continually dragged down by a shiny ship or a crusty ship,” the Singapore broker added.
Port congestion, which can push freight rates higher by cutting the number of ships available for charter, was also largely absent.
“There are not really any port bottlenecks (to tighten vessel supply),” the broker added.
VLCC and Suezmax tankers were facing a 9-12 day delay on Thursday to load at Iraq’s Basra oil terminal, according to port data seen by Reuters.
That compared with an average of 18-20 day delay according to ship agent and tracking data on April 6.
Tankers were waiting an average of five days to unload at Chinese ports, the Singapore broker said.
VLCC charter rates from West Africa to China were slightly higher which were helping support freight rates for smaller Suezmax tankers, brokers said.
VLCC rates from the Middle East to Japan rose to around W45.50 on Thursday, up from W43 last week.
Charter rates hit W41 on June 21, the lowest since Sept. 2 and equivalent to earnings of $23,182 per day, according to chartering data on the Reuters Eikon terminal.
Rates for VLCCs from West Africa to China climbed to W53 on Thursday, up from about W51.25 the same day last week.
Freight rates tumbled to around W49.75 on June 21, the lowest since Sept. 10.
Rates for an 80,000-dwt Aframax tanker from Southeast Asia to East Coast Australia edged up to W96 on Thursday, against W94.75 last week on slightly higher cargo volumes, brokers said.
Source: ReutersPrevious Next