VLCC Rates Face Uncertain Direction as Owners and Charterers Battle Over Cargo

By Keith Wallis

SINGAPORE, April 10 (Reuters) – Rates for very massive crude carriers (VLCCs) on key Asian routes face an unsure week as homeowners search to push for increased charges, whereas charterers might cap fixture exercise to chill the latest spike in costs, brokers mentioned.

That got here as VLCC charges from the Middle East and West Africa to Asia hit the very best degree since mid-February on Thursday in a flurry of exercise that noticed round 50 VLCC fixtures concluded since April 7, Reuters freight knowledge present.

“There’s certainly been a bit of a surge. I can’t really call whether the market will rock on,” mentioned one Singapore-based VLCC dealer on Friday.

“If another 20 cargoes come out it’ll rock on,” he mentioned. But if the overall fixtures for April is just like earlier months the rally would peter out shortly, he added.

While the variety of VLCCs out there for constitution fell significantly within the final week, the Singapore dealer solely noticed round 10 cargoes nonetheless to be mounted to finish April’s fixtures.

The deluge of cargo fixtures was fuelled by the Easter holidays, which left charterers with a brief window to constitution tankers to load by April-end, brokers mentioned.

“Owners (are) clearly seeing an opportunity to add to the present firm undertones, but again the total volumes for the month will be the deciding factor whether further upside could be in the cards,” Norwegian ship dealer Fearnley mentioned in a be aware on Wednesday.

VLCC charges for the benchmark route from the Middle East to Japan climbed to round W59.5 on the Worldscale measure on Thursday, up from W51 every week earlier and the very best since Feb. 13.

Supertanker charges from West Africa to China surged to W60.5 on Thursday, up from W51 final week and the very best since Feb. 12.

Rates for 80,000-tonne Aframax tankers from Southeast Asia to East Coast Australia fell to W99 on Thursday, in contrast with round W102 final week.

Rates have been sliding since March 25, though the tempo is easing, Reuters freight knowledge confirmed.

Clean tanker charges from Singapore to Japan fell to round W140 on Thursday, from round W143 every week in the past, as cargo volumes eased attributable to refinery upkeep in north Asia, a Singapore clear tanker dealer mentioned.

Rates are more likely to plateau or transfer sideways subsequent week, the dealer mentioned. (Editing by Prateek Chatterjee)