Tanker market moving on mixed sentiment
Tuesday, 29 May 2012 | 00:00
Tanker owners had a mixed week to show for. In its latest weekly report, London-based shipbroker Gibson noted that there was "steady VLCC enquiry through the week, but it needed for more than that to eradicate the slack, and allow Owners to turn the softer trend. Rates therefore slipped to around WS 55 East and WS 39 West, and will stay similar, unless or until Charterers make a more concerted move. Suezmaxes had a very busy week of it for a change, with favourable pricing to the west enticing more players to get involved. Rates to UK Continent and Mediterranean moved up by an impressive 10 worldscale points as a result to 130,000 by WS 55, though rates to the East only gained a fraction to WS 92.5, and a quieter period beckons. Aframaxes saw less activity, and that closed the lid on owners achieving more than the very low WS 90s for runs to Singapore. Another testing week ahead" said Gibson.
In a similar note, BRS mentioned that "it was a disappointing week for VLCC owners; while they were hoping to push rates above the WS60 barrier in the MEG, a few fixtures of old units concluded in the mid WS50s benchmarked the market down to these lower levels; however due to still decreasing bunker prices (-$20/t), TCE rates improved somewhat, providing (still) decent daily returns ($28,000+); voyages to the west were stable at around the WS39/40 level. With now the second decade of June stems in play, owners will have to fight to recover the lost ground, an ample tonnage list being available. The VLCCs in the Atlantic basin suffered also from a weakening Suezmax market, as rates eased by WS5 points for USG discharge (WS60 / TCE about $36,000/day) and WS55 for Far Eastern discharge options. The good news in the long run for VLCC owners was the announcement by Venezuela of a doubling (from $4 bn to $8 bn) in the amount of money that it borrows from China and repayable in oil, which should boost longhaul shipments" it mentioned.
Moving on in the Suezmax sector, the Paris-based shipbroker noted that "in comparison to the previous week’s market, this week has been marked by a decrease in activity. The WAfrica market especially, which has been particularly busy lately, has calmed down a lot. No doubt the fact that a lot of players covered their positions in advance the previous week had a negative effect on this week’s activity. As for the Black Sea market, despite the rates remaining fairly stable, we noticed a certain lack of activity for much of the week. The benchmark rates remained stable at mid WS80s levels. Moneywise, with the WAfr market at WS75-80 levels basis 130,000t, and the Black Sea at WS85 basis 135,000t, the TCE returns are respectively at $27,500 per day and $24,000 per day" it said.
On the West Africa market, Gibson noted that "Suezmax Owners spent the whole week on the defensive, with Charterers gradually slowing their fresh interest to a trickle to 'help' rates to soften. They succeeded by degree with the market falling to below WS 80 for US Gulf, and little higher than that for Europe. With holidays in the US on Monday, it’ll be a testing start, but a busier period thereafter should prevent any serious damage. VLCCs have remained awkwardly tight on early dates, limiting co-load opportunities, and rates largely theoretical at 260,000 by WS 62.5 for US Gulf discharge however, Eastern movements moved onto more forward dates where ballasters from that direction provided enough competition to push the market to as low as WS 56, with runs to West Coast India slipping below USD 4.5 m" it mentioned.
According to Gibson's report on the Mediterranean markets, "there was Aframax action, and quite intense on occasions, but it wasn’t consistent enough to provide any real solidity, and Owners continued to suffer a market topping out at a meagre 80,000 by WS 85 cross-Mediterranean. Suezmaxes recalibrated, as expected, to 140,000 by WS 80-ish from the Black Sea to Europe, but will now probably plateau out over the currently slower patch. It was a week of steady chipping away for Aframax Charterers, and although they couldn’t fashion a crash, they did bring rates down by some 15 worldscale points to 70,000 by WS 110 upcoast, and will fancy their chances of ‘knocking off’ a few more points after the holiday. VLCCs kept their nerve, and then moved through a busy phase that allowed them to push a little to USD 4.8 m for Singapore discharge, and threaten to push a little more if Charterers keep calling. Aframax Owners will probably think that they should have done better than they have. The market only moved a few worldscale points to 80,000 by WS 97.5 cross UK Continent and 100,000 by WS 80 ex Baltic, despite the hype, and there’s no upward progression likely over the coming period. Suezmaxes saw little, and good forward availability should mean that rates won’t move much higher than 135,000 by WS 65 for US Gulf if anyone wanted to play. VLCCs got the odd knock, and stayed balanced enough to maintain rate ideas of no less than USD 4.75 m to Singapore" concluded Gibson.
Nikos Roussanoglou, Hellenic Shipping News Worldwide