When the vessel supply and charter volumes demand stand even freight rates will remain firm. It is the case with Asian trades for very large crude carriers (VLCCs). The daily earnings soar by between $37,500-$42,000 in the last week.
The surge was fuelled by unloading delays in China and South Korea caused by a shortage of storage tank space and other port infrastructure issues and bad weather that could disrupt vessels’ future charter fixtures.
Charterers had an absolute fear of not getting the right ship for the right cargo.
For the third time this year, VLCC freight rates from the Middle East to Asia have hit a five-year high. VLCC rates from West Africa to China also climbed, hitting the highest level since Oct. 15 on Thursday.
Charterers are already taking steps to reduce by holding back cargoes, splitting cargoes into smaller loads or better utilising their own tonnage by increasing vessel speeds.
A Suezmax tanker can carry 1 million tonnes while a VLCC carries about 2 million tonnes. Freight rates for the Middle East to Japan benchmark route nudged above W91 on Thursday, up from 61.50 a week earlier.
VLCC rates from West Africa to China climbed to W80 on Thursday, against W67.50 the same day last week.
Rates for an 80,000-dwt Aframax tanker from Southeast Asia to East Coast Australia rose to W127.50 on Thursday, compared with W123 last week on strong cargo volumes and tight tonnage supply.
Clean tanker rates from Singapore to Japan slipped to around W107.75 on Thursday, from W108.75 last week.
Source: Reuters (Reporting by Keith Wallis; Editing by Subhranshu Sahu)
