Asian VLCC tanker rates for PG-East voyages show a sharp rise due to flood of cargoes and tight supply.
Reasons for rate hike:
- Scarce supply
- Weather delays
- Delays of VLCCs turning around and ballasting back from China
- VLCCs are a very volatile segment
- Around two dozen VLCC cargoes had flooded the Persian Gulf market overnight with five cargoes out of West Africa vying for vessels
- There are more cargoes than vessels
- Charterers prefer to pay more ships with confirmed itineraries
Reports say that the key VLCC PG-China rate at w63.5 basis 270,000 mt on Tuesday.
The December second decade position list is thin and still 20 cargoes are left to be covered this week. This high cargo rate opened the floodgates. Charterers try to sit back and wait, and there are about 10 cargoes lurking around for the second decade. The second and third decades of December are expected to be scarcely supplied with VLCCs.