Unipec charters 20 VLCCs for West Africa, MidEast cargoes; China’s oil demand to climb 3.4 pct this year – CNPC.
Freight rates for very large crude carriers (VLCCs) are expected to remain stable next week as buoyant chartering activity from the Middle East is offset by the large number of supertankers available for charter, ship brokers said.
“We’re going to see rates holding at current levels,” a European supertanker broker said on Friday.
“Saudi Arabian cargoes for February loading should be out on Monday. Charterers might be a bit nervous, trying to fix as soon as they see the cargoes in case rates climb. But it looks like there’s enough ships to keep the market in check,” the supertanker broker said.
That came after a flurry of chartering activity which saw more than 100 VLCC cargoes fixed in the week to Thursday.
They included 20 vessels chartered by Unipec, the trading arm of Sinopec, from West Africa and the Middle East to China totalling around 5.5 million tonnes of crude, chartering data on the Reuters Eikon terminal showed.
“Unipec has taken a lot of cargoes this week,” the European ship broker said.
China’s top crude oil producer, China National Petroleum Corporation (CNPC), said on Thursday that crude oil demand will grow by 3.4 percent this year to a record of 11.88 million barrels per day.
The country’s crude oil imports jumped to a record 36.38 million tonnes in December, data from the Chinese General Administration of Customs showed on Friday.
Despite the flurry in activity, shipowners saw freight rates drop by around $5,500 per day in the week to Thursday on the route from the Middle East to Japan.
Pressure on freight rates is expected to continue “as tonnage remains in abundance and (cargo) volumes are expected to lag”, Norwegian ship broker Fearnley said in a note on Wednesday.
Charter rates will also face headwinds from the large number of new supertankers that are due for delivery this year, ship broker said.
VLCC’s totalling 16.2 million deadweight tonnes (DWT), equivalent to about 7.5 percent of the existing fleet, are due for delivery this year compared with forecast zero growth in sea-borne crude oil cargo volumes, according to figures from shipping services firm Clarkson.
“New vessel deliveries is the main thing affecting the VLCC market – owners are not going to scrap an old ship just because it’s an old ship,” the European broker said.
VLCC rates from the Middle East to Japan fell to around 83.25 on the Worldscale measure on Thursday from W92 on the same day last week.
Rates from West Africa to China fell to around W83.50 on Thursday from W93.50 last week.
Charter rates for an 80,000-dwt Aframax tanker from Southeast Asia to East Coast Australia slipped to about W105.50 on Thursday from W108.75 last Thursday, equivalent to earnings of $10,274 a day.
Source: ReutersPrevious Next