Mideast Rates Climb As Heavy Fixing Seen
Freight rates for crude tankers loading early April in the Middle East were climbing early last week as shipowners held out for higher prices in expectation of heavy vessel fixing, brokers said.
VLCC rates to the U.S. Gulf were expected to rise five or more Worldscale points to W62.5-65 ($10.75 per ton) for the next done fixture, some brokers said. Japan shipment prices were also lifting with the latest bookings at W70 ($7.50 per ton), up from W67.5 in the week before.
"We believe this week will be heavy for one reason alone, there will be placement of barrels West to alleviate the shortage that the U.S. market is stressing," broker Marinav Shipping & Trading forecast in its March 13 report.
"Owners are holding out to get the rates to go higher because of bunker costs," another broker said.
Marinav predicted an early release of Iraqi barrels heading to the U.S. Bunker fuel prices fell back by more than $15 in Singapore to about $178, after going over $200 a week earlier.
However, levels were still high enough to make longhaul journeys uneconomic, particularly for older ships. A lack of suitable modern tonnage available early April for U.S. acceptances was also encouraging owners to push for higher rates.
"Everybody appears to be waiting for the first company to pay over W60 to the U.S.," another broker said.
"If there is a hold back then it will be charterer's playing at getting the best they can out of the owners rather than all coming into the market place like they did four weeks ago," Marinav added.
Other sectors appeared to be softening, though. Slow activity in the Mediterranean and North Sea saw Aframax rates coming off a couple of points to about W167.5 ($5.50 per ton) and W182.5 ($6.75), respectively for modern ships, brokers said.
Suezmax business was also quiet with rates largely unchanged from the end of last week. - (Reuters)