Atlantic rates to soften as owners compete for work.
BP receives eight offers for one cargo as confidence erodes on major trading routes.
SUEZMAX tanker operators and owners were offering discounts for West Africa to Europe routes to keep trading on the western side of the Atlantic, placing pressure on transatlantic rates, brokers said.
West Africa to US, and West Africa to Europe rates were expected to soften this week as competition rose for a limited number of cargo loadings this month.
Competition was so high that British oil major BP received offers from eight owners for just one cargo, a London broker said. ?Over the last couple of days we have seen confidence, especially for the transatlantic voyages, eroded on the back of the weakening West Africa to Europe market,? the London broker said.
?Because the Mediterranean and Black Sea was quiet, owners that usually work that market had ballasted tankers to West Africa, looking for cargoes to head back to their favoured area ? the Mediterranean.
?In the middle of the week there were a couple of cheaper fixtures done [West Africa] to the UK Continent and Mediterranean because people wanted to get back to Europe. This really knocked the stuffing out of the owners and then we saw the [transatlantic] market come down quickly after that.?
The rate on the Baltic Exchange TD5 route ? shipping 130,000 tonnes from the Bonny terminal, Nigeria to Philadelphia in the US ? started last week at W126 or $38,250 per day, but fell to W118, or $33,700 per day by last Friday.
French oil major Total fixed three suezmax tankers at successfully lower rates to ship West African crude to UK Continent, loading in the last two weeks of this month.
Geneva-based broker Riverlake Shipping said Total fixed the 2008-built, 164,154 dwt Sina at a rate of W110, and then booked the 2005-built, 152,622 dwt Ottoman Nobility at W105, with the 2009-built, 156,929 dwt Toska following at an undisclosed rate.
?There was a bit of an oversupply and [rates] are getting softer, definitely. That will remain the trend on the suezmaxes,? the London broker said.
A Gibson analyst said: ?There does not seem to be a lot of inquiry and that has weakened the sentiment, which is why the rates are moving down.
?Rates are pretty good at $35,000 per day. They are higher than they were at bottom levels in the third quarter of 2009. But they are still considered lower than in 2008. They are a healthy rate and far more than the operating costs for suezmax tankers that are around $10,000 per day,? she said.
Spot rates for suezmaxes operating in the Black Sea and Mediterranean fell last week as charterers held back cargoes.
The rate for the Baltic Exchange TD6 route ? shipping 135,000 tonnes from Novorossiysk to Augusta ? was W110, or $28,227 per day last Friday, down from W116, or $32,150 per day, the week before.
A Norwegian broker said that rates for cross-Mediterranean routes, loading from Ceyhan were around W105 and rates for Black Sea loadings were in the W105-W110 range.
?It is about supply and demand, but the market is steady with some activity,? he said.