Owners push up West Africa rates
Influx of crude cargoes as charterers lose their "discipline" allows spot prices to climb back up
SUEZMAX owners have breathed a sigh of relief after turning round the West Africa market and pushing daily earnings back up over $4,500 last week to $24,294 per day.
An influx of West African crude inquiry gave owners a bullish attitude to fight back against falling rates. As more tonnage was fixed, their confidence continued to build and the number of available ships started to shrink.
?Suezmax charterers in West Africa lost the discipline that had served them so well last week, and entered in sufficient numbers to allow owners to ramp rates up to the W97.5 level for transatlantic runs, taking 130,000 tonne cargoes,? London-based broker Gibson said in its weekly tanker report.
?A lack of naturally placed very large crude carriers threatens to keep the emphasis on the smaller size, so owners will hope charterers once more relax their guard, and allow for another push upwards.?
Time charter equvialent earnings on the West Africa to US Gulf route hit a 14-month high in mid-January, when spot charter prices reached $62,386 per day, with Worldscale rates around W174, according to Baltic Exchange data.
By comparison, its TD5 route from Bonny to Louisiana Offshore Oil Port climbed for a seventh day on Friday to W99 or $24,294 per day, from a low of $17,844 two weeks ago.
Hetco was responsible for pushing the market up at the end of last week, when brokers reported it had booked a Gemini Tankers suezmax at W97.5 to load in West Africa between March 10-11, with discharge in the US Gulf.
Another London broker also expected the rates to firm, as the lack of VLCCs and the tightening tonnage list had helped support suezmax prices.
?A lot of prompt suezmax tonnage has been absorbed in the Mediterranean, which has affected the supply of vessels available in West Africa. I think this week the next done will be W100 and will firm further,? he said. ?I am not sure by how much ? I would need a crystal ball for that ? but the signs suggest that suezmax rates are going to firm.?
Norwegian broker RS Platou reported 17 West Africa fixtures last week, including a rare fixture to Australia. US oil company Chevron booked the 2001-built, 165,000 dwt Amore Mio II for a trip loading on March 13 in West Africa to Australia.
Indian Oil Corp has also booked a non-traditional voyage, taking Nigerian crude on the 2007-built, 167,000 dwt Evridiki on March 1 to Vadinar in India for a lumpsum of $2.75m.
Over in the Black Sea market, last week also started quietly, with a few surplus cargoes absorbing some of the ?weaker? ships available in the area, brokers said. By the end of the week, though, the improving West Africa market appeared to have left Black Sea rates poised for a lift, despite delays transiting the Turkish Straits dropping to just two or three days.
?Suezmaxes have seen a rising amount of activity, with the Russian March programme getting into full swing and charterers getting in before the rates move up in line with West Africa.
Several deals were concluded for 140,000 tonne cargoes in the W80-W82.5 level, but [we] expect rates to firm into next week,? Gibson said in its weekly report.
The Baltic Exchange TD6 route, shipping 135,000 tonne cargoes from Novorossiysk to Augusta, climbed on Friday to W87 with time charter equivalent earnings of $13,705 per day.
By comparison, the week before, daily earnings were as low as $9,375 per day.
Dutch oil giant Shell was reported to have booked the 2003-built, 164,533 dwt Zarifa Aliyeva at W82.5, to take a 140,000 tonne cargo loading on March 5 at Novorossiysk and discharge in the UK Continent.
Meanwhile, Total"s shipping arm CSSSA was understood to have fixed the 2005-built, 163,750 dwt Besiktas Bosphorus at W85-W90 to take a more conventional 135,000 tonne cargo from the same port to the UK Continent or the US Gulf.