OFE: Asian VLCC Rates to Continue Falling

Image Courtesy: Tanker Investments

Very large crude carrier (VLCC) rates on the AG/Japan route tumbled by nearly w10 points within a day to w60 on Tuesday, according to Ocean Freight Exchange (OFE).

The drop comes on the back of S-Oil placing its tanker Australis on subs for an AG/Onsan run at w54.75, as charterers “went for the jugular,” with at least 4 older vessels fixed within the range of w55-w58 for an AG/East voyage.

“We believe that VLCC rates will remain depressed in the short term due to the upcoming refinery turnaround season in Asia, diminishing floating storage inventories that will free up more tonnage as well as OPEC production cuts,” OFE said.

Asian refinery maintenance over the next two months is expected to lower March cargo flows out of the AG, weighing on VLCC rates. At least 2 mmb/d of refining capacity in the East of Suez is expected to be offline in March, more than double that of last year.

China’s state-owned refiners account for around 50% of overall shut capacity in Asia in March, which will reduce AG-loading cargo volumes.

Additionally, the overall impact of OPEC’s production cuts “is evident from the fall in VLCC fixtures from the AG.”

The number of fixtures is estimated to have dropped by 9% m-o-m to 145 in February.

According to OPEC, compliance reached over 90% in January with Saudi Arabia shouldering the bulk of agreed cuts.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Sep 2017 >>
MTWTFSS
28 29 30 31 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 1

BWMTech North America

Are you operating to international standards? Clarify regulations. Plan BWMS integration…

read more >

NEVA 2017

The diversity of the Conference Programme is well-rounded by a broad spectrum of topics including Commercial Shipbuilding, Offshore and Marine…

read more >

LIQUEFACTION OF BULK CARGOES SEMINAR

GET TO GRIPS WITH:
– Mechanisms behind liquefaction
– Guidelines and regulations for bulk cargoes prone to liquefaction…

read more >

Seatrade Offshore Marine & Workboats Middle East

The largest event for offshore marine and workboat sectors in the region, Seatrade Offshore Marine & Workboats Middle East will, once again, serve as a meeting point for international industry professionals to come together and do business. Our 2017 show promises a wealth of networking opportunities, high-level discussions in our conferences on important industry trends, […]

read more >