Rates for Large Crude Carriers Could Inch Lower As Market Enters Holiday Mode

Front Warrior, image: Frontline

By Keith Wallis

SINGAPORE Dec 20 (Reuters) – Dirty tanker rates on key Asian freight routes could edge down next week due to year-end holidays, but are likely to remain firm, ship brokers said on Friday.

Rates on the benchmark very large crude carrier (VLCC) export route to Japan from the Middle East on Thursday rose to W62.5 in the Worldscale measure, up from W61 a week earlier.

But Shell and Exxon paid a premium, fixing tankers at W63.5 on Thursday and Wednesday, for early January loading positions, chartering data showed.

“These were very much positional fixtures so charterers paid a higher rate,” said one Singapore-based tanker broker.

“The market was quiet early in the week, but has started to come alive in the past two days. We expect it to quieten again next week.”

Norwegian shipbroker Fearnley said in a research note that rates would remain around current levels.

Charter rates for VLCCs from West Africa to China remained unchanged at W59.5 on Thursday from the week before.

Unipec, the chartering and shipping subsidiary of Sinopec and Taiwan energy company CPC, were both active on Thursday, according to chartering data.

But the market has been flat as charterers remained quiet, a VLCC broker said.

Rates for 80,000-tonne aframax tankers from Southeast Asia to East Coast Australia continued to surge, rising to W110 on Thursday, up from W105 a week earlier.

“Charter rates started to come off on Thursday as charterers concluded business ahead of the holiday. We think that softening will continue,” said a Singapore-based aframax broker.

In the clean tanker market, rates for medium range tankers travelling to Japan from Singapore climbed to W117 on Thursday, against last Thursday’s close of W114.

Charter rates are expected to remain relatively firm because tonnage is tight and charterers want to fix their remaining cargoes before the end of this year, Fearnley said.

The next Asia tanker report will be on Jan.3

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