Rates for dirty tankers on key Asian freight routes are expected to hover near this year's low as an oversupply of vessels overshadows Chinese demand for Middle East crude, ship brokers said on Tuesday, Reuters reports.
Rates on the benchmark very large crude carrier (VLCC) export route from the Middle East to Japan dropped to this year's low of W38.86 on Monday, down 7 percent from W41.89 last week as ample tanker availability outweighed support from Chinese demand. The market has fallen for seven consecutive sessions.
"Chinese contract fixing continued to make up a significant portion of the market activity that did take place, whilst the few spot cargoes that emerged received multiple offers from the flotilla of vessels seeking employment," said broker firm SSY.
The Baltic Exchange's rate for 260,000-tonne crude tankers from West Africa to China fell to W42.18 from W42.50 last week.
"With cargoes being drip-fed into the market, rates show no sign of improving," said broker firm ICAP.
Rates for 80,000-tonne aframax tankers from Southeast Asia to East Coast Australia edged down to W88.63 from W89.06 last week.
In the clean tanker market, rates for long range (LR1) tankers on the benchmark TC5 Middle East to Japan route rose nearly 14 percent to W120.42 on Monday from W106.04 last week on robust freight demand. The market hit a seven-week high of W120.67 last Friday.
"The market has been quieter ... and with a few vessels available up to mid-July the activity needs to increase in order to maintain these levels," ICAP said.
In the intra-Asia market, medium range (MR) tankers travelling from Singapore to Japan climbed 2 percent to a one-month high of W123.13 from W120.63 last week.
All news