Supertanker Freight Rates Back on Track

Wednesday, May 02, 2001
Freight rates for supertankers to Asia, which last week suffered their most serious decline in over two years, have now stabilised and look set to recover, tanker brokers said on Wednesday.

One London broker referred to a VLCC fixture, the Lyria, on Monday to South Korea at W47.5 ($0.80 per barrel) as an exception to the market and the lowest point that it would go.

"That fixture of the Lyria we can say marks the bottom of the market and we'll see a gradual recovery from here," he said.

He pegged eastbound trades from the Mideast Gulf at W57.5 ($0.97 per barrel) and westbound trades at a similar level on worldscale, equating to $1.67 per barrel.

Another broker said that after Golden Week in Japan, holidays in Asia and May Day in Europe the market would take a while to warm back up.

"Charterers will probably now play it tactically," he said. "They'll drip-feed their cargoes onto the market rather than let them all go at once."

The slump last week saw the market losing W10 ($0.17 per barrel) overnight on Wednesday on a single cut-price fixture at W58, which took the market to a 13-month low.

This represented a 41-point ($0.69 per barrel) slump in the space of a month - the most serious in over two years -- which brokers put down to too many tankers in the Mideast Gulf chasing too few cargoes.

London brokers said the Lyria fixture at W47.5 was never really representative of the true state of the market because of the tanker's age.

"There are discounts for older ships, and that's what happened here. The Lyria was a 1977-built ship, but some would say it was still discounted too much," said one.

Another pointed to the fixture of the Taos by LG Caltex for a cargo to Korea at W75 as proof the market was much stronger than the Lyria fixture suggested.

One tanker analyst observed that a period of low rates should be welcomed by tanker owners. "At W47.5 the older ships will be losing money," he said. "It would encourage owners to scrap the older ships, and that can only be good for the long-term supply-demand balance."

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Jacques R. Saadé Visits the CMA CGM Columba

During the CMA CGM Columba call in Beirut, Lebanon, on August 19, Jacques R. Saadé, CMA CGM Group's Chairman and Chief Executive Officer, visited the 11,400 TEU ship.

Reliance to Source Ethane from US

India's Reliance Industries Ltd said it will source 1.5 million metric tons of ethane a year from the United States as feedstock for its crackers in India. The

Dredge Yard to Participate in Latin American Congress of Ports

Dredge Yard announced it will for the first time participate in the Latin American Congress of Ports that will be held in less than a week in Puerto Iguazú in Argentina.

Bulk Carrier Trends

Star Bulk to Acquire 34 Drybulk Vessels

Star Bulk entered into a definitive agreement with Excel Maritime Carriers Ltd., and as a result, will acquire 34 drybulk vessels for an aggregate of 29.917 million

Russian Food Import Ban: Trucks Lose, Shipping Wins

Team Niinivirta, a Finnish family-run transportation firm, turned 60 this year, but its third-generation managers now don't know if the business will see Christmas,

OceanSaver Reports Surge in BWT Orders

OceanSaver said it has received a rush of ballast water treatment (BWT) system orders for large vessels. The Norwegian firm, a BWT specialist developing solutions since 2003,

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Salvage Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1812 sec (6 req/sec)