Freight rates for very large crude carriers (VLCCs) in West Africa are likely to be pushed higher as the region sees tight vessel supply, while rates on key Asian freight routes are diverging with too much tonnage in the Middle East putting downward pressure on rates.
In a recent research note, Norwegian broker Fearnley said the recent firmness seen in VLCC market eased off a bit during two weeks ago as charterers slowed down their interest, adding that charter rates from West Africa remained stable.
VLCC rates on the West Africa-Far East route, basis 260,000 mt, last month rose Worldscale 1 to be assessed at w41, with shipping sources attributing the rising rates to sentiment rather than underlying fundamentals.
The w41 assessment equates to $16.57/mt, the highest since an identical $16.57/mt assessment on April 30. Rates rose after brokers reported Unipec put the Boston VLCC on subjects for a WAF-China voyage at w41 loading July 11.
Around 30 cargoes from the Middle East to Asia have been fixed for shipment between July 11-20 with more than 10 charters concluded for the period between July 21 and 31.
Other brokers earlier predicted there would be 115-120 VLCC ship charters for Middle East – Asia cargoes in July compared with around 107 for June.
Rates for a VLCC voyage on the benchmark route from the Middle East to Japan were down to W48 on the Worldscale measure last Thursday, down from W50 two weeks ago, the highest level since March 5.
Unipec, the trading arm of Chinese oil major China Petroleum & Chemical Corporation (Sinopec), has been the most active charterer so far this week although many of the fixtures were concluded as contracts of affreightment that had little impact on spot charter rates.
Rates for West Africa to China rose to W50 last Thursday, the highest since March 3.
In other trades, rates for 80,000-tonne aframax tankers from Southeast Asia to East Coast Australia slipped to W91 last Thursday down from W99.5 a week earlier which was the highest since Feb. 5. This followed an increase in available tonnage and a cooling in demand, brokers said.
Clean tanker rates from Singapore to Japan slipped towards W108.50 on Thursday, down from around W110 two weeks ago, although Fearnley expected a rebound in the coming days on firming cargo demand.
FEMI ASU
