By Keith Wallis
SINGAPORE, July 22 (Reuters) – Freight rates for very large crude carriers (VLCCs) are likely to hold steady around existing levels as new vessel deliveries and a reduction in port delays weigh on a ample cargo market, ship brokers said.
“The market will not be majorly different next week. VLCC rates have been limping along,” a Singapore-based supertanker broker said on Friday.
New tanker deliveries, vessels returning to service from repair yards, minimal scrapping of older ships and little port congestion have all contributed to swell the number of ships available for charter, brokers said.
“It’s a pure market from the point there is virtually no disruption,” the Singapore broker said.
Delays for supertankers to unload crude at ports in China such as Qingdao, have fallen to three or four days compared with up to 30 days in April, brokers said.
Tankers are waiting about eight or nine days to load crude at Iraq’s Basra oil terminal compared with three weeks in April, shipping data on the Reuters Eikon terminal showed.
“There are no real bottlenecks, no disruption,” the Singapore broker said.
Rates from the Middle East to Asia are likely to hold around 43-45 on the Worldscale measure next week, while rates from West Africa to Asia will be around W48, a second Singapore supertanker broker said.
“Owners need to be more disciplined to resist fixing at current levels for freight rates to bump up,” the second broker said.
That came as charterers this week began to release VLCC cargoes for loading in the Middle East in mid-August after concluding 29 fixtures for loading in the first 10 days of August.
The slow volume of cargoes from West Africa, the Caribbean and the North Sea have weighed on the VLCC and Suezmax markets, adding to the number of ships available for charter and dampening rates, brokers said.
“The Suezmax market has taken a right dive, although I think we have seen the bottom,” the first Singapore broker said.
VLCC rates from the Middle East to Japan were around W43.75 on Thursday against W44 last week. Rates hit W44.75 on July 20, the highest since July 1.
Charter rates for VLCCs from West Africa to China were near W48.75 on Thursday, up from W48 a week earlier.
“The cargo programmes available show that August will not be a particularly heavy month. It is time to buckle up and hold on tight as the market is looking very soft going forward,” Norwegian ship broker Fearnley said in a note on Wednesday.
Rates for an 80,000 deadweight tonne Aframax tanker from Southeast Asia to East Coast Australia slipped to about W86.25 on Thursday from W89 the same day last week on smaller cargo volumes, brokers said. (Reporting by Keith Wallis; Editing by Christian Schmollinger)
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