Another good week for VLCCs

2013-11-12

Recent improvements in the VLCC market have continued this week with earnings topping $40,000 a day from West Africa and the AG to China and Japan respectively.

According to London broker Braemar Seascope the week started quietly as charterers withdrew from the market to try and cool it down after last week's gains for owners.

However owners kept their nerve knowing there were still November cargoes to be carried, and for once this year the charterers cracked first. A few started into December cargoes and, in the broker's words “the fireworks went off again”.

Although the bonanza was mostly for eastern cargoes, even AG/US, the poor relation since the US began reducing crude imports, managed to reach $30,000 a day on a round trip basis.

The rises in primary trades had a knock-on effect in other, newer trades like Caribbean/East and Brazil/China.

The forward situation looks favourable for owners with the 30 day availability index showing 46 vessels arriving in Fujairah against 63 last week - the list is very short of high quality tonnage, says Braemar.

To put this recent flurry in perspective, average VLCC earnings have still only averaged $11,000 a day this year, according to Clarkson Research figures, with the marquee eastern routes barely above that average - i.e about opex.

Unusually the fortunes of the VLCC market do not seem to have had any beneficial effect on the suezmax market which plunged by nearly 50% last week but have not bounced back much this week.

Theoretically, as of October 1st, there were still 5.1m dwt of VLCCs and 3.4m dwt of suezmaxes still to deliver this year, none of which is going to help the big tanker market even if winter is upon us.

Published in Americas, Asia, Europe, Middle East & Africa, Finance & Insurance, Ship Operations, Tankers

Source from : seatrade-global.com

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