Bunker price for Worldscale 2013 flat rates set at $686/mt, up 13% on year
Worldscale flat rates for shipping oil in 2013 will be calculated based a bunker fuel price of $686/mt, up 13% from the $606.56/mt used to calculate flat rates in 2012, the Worldscale Association has announced on its website.
The association uses a fixed price for bunker fuel to set its annual flat rates, which it calculates by taking an average of 380 CST fuel oil prices for the 12-month period to September of the prior year, as assessed by LQM Petroleum Services.
While some initial 2013 flat rates are expected to be announced by mid-November, most rates will be published in the second half of December.
The market had expected the bunker price to be factored in to 2013 flat rates to be higher than the one used in 2012, a source at a clean product tanker owner said.
"The Worldscale rate [points] for next year will simply be a function of supply and demand," the source said, when asked if he expected Worldscale points in 2013 to be lower than current levels.
The freight cost, or Worldscale points, for hiring a tanker is expressed as a percentage of the annual flat rate published by the Worldscale Association at the start of each year.
With the bunker price to be used in 2013 flat rates rising 13% year on year, tanker market participants predicted flat rates for key voyages would rise by about 9%.
"The charterers are watching things closely. They will [check] freight expenses of past years and adjust rates accordingly," a tanker broker said.
"The increased flat rates will be reflected in reduced Worldscale points to keep things on an even keel for charterers vis-a-vis owners," he added.