Browse：6869

From：ASB

Time：2016-03-25

Worldscale rates on key Asian Very Large Crude Carriers routes fell sharply this week due to the easing of delays at China’s oil receiving ports coupled with charterers resorting to the strategy of drip feeding the market with cargoes, said sources Thursday.

Rates on the key VLCC Persian Gulf-to-Japan route fell 39 Worldscale points week on week to w61 basis 265,000 mt Thursday.

“The market has moved back after the abnormally high rates [for this season]. Spring is the maintenance season for Asian refineries so demand should not be strong,” said a North Asia-based charterer.

It was a roller-coaster VLCC market this month with the key PG-Japan rate rising from the year’s low of w50.5 at the start of the month to w102 in mid-March due to firm demand for cargoes loading in late March and tight supply from various port delays.

The last decade of March saw an influx of 55 VLCC cargoes, while the typical number is around 40 cargoes for the last decade of each month.

Sources said that for VLCC cargoes loading after April 5, vessel availability was no longer tight with port delays in China falling to five or six days from a waiting period of two weeks.

Demand for vessels has also returned to the typical levels with 38 cargoes fixed for the first decade of April.

The lowest fixture rate seen this week was S-Oil having placed the Kalymnos on subjects for a Ras Tanura-Onsan voyage, loading April 12-14, at w57 basis 280,000 mt. Sources said this was a discounted rate as the Kalymnos was a 2000-built vessel.

Market sources said rates were expected to bottom out as levels approached the low of the year — w50.5 — last seen on March 3, showed Platts data.

“The market is approaching the bottom, [competitive] owners are disappearing and the available ships on the list are mainly handled by strong owners. However I don’t believe there is any rebound [as the fundamental supply is more than demand],” said a South Korea-based charterer.

Charterers were expected to “cherry pick” re-let vessels and hold back until next week to charter for the remaining cargoes loading in the second decade of April, said a broker.