VLCC Tankers on the Upside on Stronger Demand
The VLCC market continued to strengthen this week with sentiment supported by both stronger demand and expectations for the October Middle East and West Africa programs to rise substantially from September levels, according to Charles R.Weber Weekly.
According to the latest report from shipbroker Charles R. Weber, “in the VLCC market, 35 fixtures were reported this week marking a 9% w/w gain and the most since May. In the West Africa market, demand rose by 40% w/w to 7 fixtures and the most since July."
"China made up a large portion of the demand gain as observed from the fact that combined Middle East and West Africa fixtures headed to the country were at a YTD high (though on a four?week moving average basis this week was at a seven? week high)," says the report.
CR Weber noted that “the emergence of Iraq’s October Basrah program showed that VLCC cargoes from the terminal would rise by 59% m/m to a new high. The total implied export rate across all vessel classes is set to rise to 3.68 Mb/d from 3.02 Mb/d in September.
The figures also boosted owners’ optimism, paring some earlier pessimism that the short Middle East cargo programs observed during August and September represented a new normal.
CR Weber pointed out, “though the September Middle East program concluded with just 113 cargoes, which saw 13 surplus units carry from September to October dates (a higher figure than we previously projected but 24% less than the surplus at the conclusion of the August program), we expect that the surplus will be easily overcome by activity strength and optimism for forward demand during Q4”.
