clean tanker trades from the Arabian Gulf continued to plumb new
depths yesterday, but Asian brokers were quick to play down one
rock-bottom fixture that threatened to drag the market lower still.
Korean charterer Han Wah currently has a 75,000 tonner on subjects at
W185 ($23.7 per tonne) for a trip from the Gulf to South Korea,
brokers said, adding that this was at least 40 points below the
current market rate.
"The last done was W220 ($28.2 per tonne), but you have to realize
that Han Wah has some kind of stake in that ship," said one
broker. "That ship is part controlled by Han Wah itself."
"People are trying to talk the market down to sub-W200, but you
won't see that rate done again today - maybe by the end of the week -
but not today," he added.
The slide in rates in "east of Suez" markets started with
the Eid Al Adha holidays in early March, and since then rates for
long-range tankers from the Gulf have nearly halved. On March 2,
London's Baltic Exchange pegged the benchmark clean trade from Saudi
to Yokohama at W361 for 75,000 tonne cargoes, but by April 2 it had
dropped to W214. Brokers said further losses could follow as today's
fixtures are factored in.
Singapore brokers said that a pile up of medium-range ships (MRs) had
been cleared, and that the market was set for a period of stability.
"I'm looking out of my window at the anchorage, and I can't see
much sitting out there," said one. "The earliest ship for a
prompt cargo would be on the eighth or ninth (of April)."
Another broker said the market looked tight for dates between April 5
and April 10, and that the MR tanker Hellas Progress, which is
currently sitting waiting for spot cargoes, was the last available
He put rates for 30,000 tonne cargoes from Singapore to Japan at W270
($17.7 per tonne), while Singapore to Hong Kong was W300. The market
stood at W340 ($22.2 per tonne) in mid-March, but a build up of
unemployed tonnage led to a severe rate-slump towards the end of the
London brokers said that 30,000 tonne transatlantic trades stood at a
notional W315 ($29.4 per tonne), while Caribbean 30,000 tonne trades
stood at W285 ($12.8 per tonne). Meanwhile, shipping's most volatile
market, the Caribbean up coast trade, has plummeted in the last few
days to levels not seen since last November and freight costs are now
less than half of what they were just two weeks ago, brokers said.
But they were also quick to point out that this was merely a normal
part of the yearly cycle as refinery turnarounds start to bite into
the supply-demand balance. "Every April for the last three years
the Aframax (70,000 tonner) market has dumped 40-50 points," said
one U.S. broker. "A lot of crackers are down. Hess has had one in
St Croix down since mid-January."
Freight graphs from London shipbroker SSY confirm the observation. The
decline ends a bull-run that started in mid-February when fog delayed
lightering and loading schedules in the U.S. Gulf, forcing up rates.
Oslo brokers reported yesterday that Equiva had fixed a modern tanker,
the Guardian, for a 70,000 tonne cargo from Mexico at W159 ($1.2 per
barrel), while in mid-March it was forced to pay about 84 per cent
more ($2.2 per barrel) for a similar fixture.
London's Baltic Exchange pegged the benchmark route from Venezuela to
Corpus Chisti in the U.S. Gulf at W163 yesterday, compared to W250
Source: Gulf News©