Suezmax rates set to slip from W100 level.
Charterers continue to put pressure on West Africa to US market.
WEST Africa suezmax charter rates are set to fall below the pyschological W100 barrier this week, or under $25,000 per day, as charterers maintain control in the spot market to force rates down on voyages to the US Gulf.
After just three weeks back in triple digits, rates are on the slide again as the number of suezmaxes from the global fleet of 400 available in the spot market climbs, fuelling charterers" confidence.
?The market isn"t exactly inspiring for owners,? said one London broker on Friday.
?It certainly hasn"t reached the bottom, and although W97.5 hasn"t been done yet it"s definitely going to happen.
?Every cargo entering the market is seeing plenty of offers, which just makes the charterers feel much more confident and allows them to try to push even lower.?
Tonnage has been building up as chartering activity slows. With ships booked for nearly all crude cargoes to be loaded in March, sentiment has weakened as the market awaits dates for April"s loading programme in West Africa.
Spot rates on the Baltic Exchange TD5 route, shipping 130,000 tonnes of Nigerian crude oil to the US on a round trip basis, slid back down to W102 on Friday, with time charter equivalent earnings of $25,521 per day. This compares to a seven-week high of W132, or $41,107 per day, reached in late February.
Norwegian broker RS Platou reported just six West Africa suezmax fixtures last week, compared to at least 12-15 in busier weeks. This included US-based Hess and Marathon booking modern tonnage on the West Africa to US route at W102.5.
Oil giant BP dragged the market further down, in the same way it did last week, with Greece"s Optima Shipbroking reporting that it had taken a Gemini suezmax at W100 for a voyage loading on March 26.
Following a pattern that has become increasingly common over the last year, Black Sea and Mediterranean suezmax rates were affected by the West Africa market, as charterers chipped away at hire prices as ships positioned to load in April build up. Geneva-based Riverlake Shipping kept its Black Sea rate at W100, or $26,187 per day, with cross-Mediterranean trips paying slightly higher at W105, or $28,877 per day.
?The only funny thing that has happened this week was the last cargo fixed paid a premium because there actually weren"t many vessels naturally positioned for March loadings,? said another London broker. ?Trafigura had an end month cargo on March 31, and fixed the 2009-built, 144,950 dwt Maran Pythia for a Black Sea to UK Continent trip and paid W114.?
The only other business concluded at the end of last week was Bharat Petroleum Corp booking two suezmaxes to load crude from Arzew in Algeria at $2.6m each for trips to India. It hired General National Maritime Transport"s 2008-built, 160,391 dwt Aisha and Shipping Corp of India"s 2004-built, 157,957 dwt Desh Shakti.