VLCC Rates Poised To Stay Strong

Owners of VLCCs have been painstakingly building up rates this week, but for owners of million-barrel tankers, the last month's gains have come crashing back down. "(VLCC) tonnage is relatively scarce, especially for early positions, while enquiry is plentiful, and we expect some good times ahead from an owner's perspective," said Oslo ship broker Fearnleys. Westbound VLCCs from the Mideast Gulf gained five points during the week to reach W89, while eastbound VLCCs gained four points to reach W104. VLCCs out of West Africa saw plentiful enquiry at the start of the week, in part by moving in on million-barrel business, brokers said. Transatlantic VLCC freight on Friday was W117. "A lot of charterers are taking Vs (VLCCs) now, and all the Suezmaxes (million-barrel tankers) are building up with nothing going on in the Med and North Sea," a London broker said on Wednesday. The result was that million-barrel rates plummeted. Oslo brokers said Sun had fixed the million-barrel Cosmic for a mid-April transatlantic voyage at a rate of W125, about 50 points down on week-ago levels and a rate not seen since the lows of early February. Meanwhile, brokers said that rates for Aframaxes (70-80,000 tonners) had varied wildly during the week according to location. London tanker broker Gibsons noted a "marked upturn in Aframax enquiry in the Mediterranean", leading to rates of W260 for modern vessels. By contrast, Fearnleys described the North Sea market as "primed for a beating", after several days of total silence. Rates fell about 50 points during the week to about W200. The Caribbean market also suffered a downward trend, drifting down 25 points to around W275 for voyages to New York. Gibsons noted that million-barrel tankers had made an incursion into this Aframax stronghold. "For those charterers able to combine stems, million-barrel vessels were able to provide a real saving, fixing at around W170," it said. - (Reuters)