Unipec fixes VLCC to carry HSFO on NWE-East route
Trading company Unipec has this week fixed a VLCC to carry high sulfur fuel oil from Northwest Europe into China, despite similar deliveries having recently been made on smaller Suezmax vessels due to tight VLCC availability in the region, sources said Thursday.
Sources said they had heard that the 270,000 mt Blue Topaz had been fixed for a lump sum rate of $4.75 million to load November 10-11 in Northwest Europe for delivery into China, but with options to discharge at another location.
A source at Unipec confirmed the fixture, but not the rate.
"I have heard that the Blue Topaz is fully fixed for a Skaw, Denmark to Ningbo, China route and from what I can tell it is loading fuel oil. I would fully expect that the general discharge region would be Ningbo," said one shipbroker.
"I am calling current freight rates for a typical Rotterdam to Singapore route at $3.5 million lump sum and the premium for Ningbo is between $1.1 and $1.2 million, so the $4.75 million lump sum rate sounds about right," he added.
A second shipbroker said: "There is a definite shortage of VLCCs in the [NWE region] at the moment, and from what I can tell the cargo looks like it will be fixed for delivery with a min disport of Ningbo or Qingdao, which may go some way to explain the higher freight rate."
One source said the Blue Topaz could potentially have a part cargo of crude oil on board as well.
Traders suggested that Unipec was taking fuel oil east in order to meet existing demand commitments in the region.
"They need [the fuel oil] on the other side," said one fuel oil trader. "They would rather take some Venezuelan fuel if it's there, but if not they'll load in Rotterdam."
On Monday, Shell was heard to have fixed the VLCC DHT Eagle at a lump sum rate of $3.3 million on the Rotterdam-Singapore route for loading November 6.
Other companies have been heard shipping HSFO from the key Northwest European blending hub of Rotterdam to Singapore, the world's largest bunkering port, on smaller Suezmax vessels because of tight availability of prompt VLCCs.
"It is very tight for VLCCs in the Atlantic and that is why we are seeing Suezmaxes being fixed," said one shipbroker.
"This in turn might help freight rates for Suezmaxes which have been very weak lately. With more vessels traveling east, this will reduce Suezmax tonnage in the long run," he said.
Three Suezmaxes carrying HSFO were placed on subjects Wednesday afternoon.