Middle East tanker rates poised to rise
The cost of shipping Middle East crude to Asia, the world's busiest route for supertankers, may end 21 days of declines as the supply of ships shrinks.
While the list of available tankers exceeds outstanding cargo demand, ship supply typically becomes "thinner" toward the end of February, Per Mansson, a tanker broker at Nor Ocean Stockholm AB said in an e-mailed note last week.
"It could be that we are trawling the bottom now, but it could be that we'll stay there for a bit longer," he said.
S Oil Corp, a Seoul-based refiner controlled by Saudi Arabia, hired the tanker Astro Carina at a rate of 75 Worldscale points, according to a report from Athens-based Optima Shipbrokers.
That's 14 per cent below the Baltic Exchange's benchmark assessment of 87.50 points for voyages to Asia.
Astro Carina, built in 2003, should normally cost more to hire than the benchmark because it's fitted with two steel hulls to cut the risk of an oil spill. The exchange's assessment is for vessels up to 15 years old, including single-hull tankers.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
At 87.50 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $53,098 a day on a 39-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine fuel prices.
Frontline Ltd., the world's biggest VLCC operator, said November 15 it needs $30,000 a day to break even on each of its supertankers.
Taiwan Maritime Transport Co Ltd, a Taipei-based shipper and trader of freight derivatives, hired three supertankers and wants more, expecting higher rental rates.
TMT hired the VLCCs Shinyo Navigator, Safwa and Maritime Jewel for 90 to 120 days at fixed daily rates, head of research T.C. Chang said by phone from Taipei. He wasn't able say how much TMT is paying or how many more tankers the company wants to hire.
Bookings for VLCCs sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP.
While the list of available tankers exceeds outstanding cargo demand, ship supply typically becomes "thinner" toward the end of February, Per Mansson, a tanker broker at Nor Ocean Stockholm AB said in an e-mailed note last week.
"It could be that we are trawling the bottom now, but it could be that we'll stay there for a bit longer," he said.
S Oil Corp, a Seoul-based refiner controlled by Saudi Arabia, hired the tanker Astro Carina at a rate of 75 Worldscale points, according to a report from Athens-based Optima Shipbrokers.
That's 14 per cent below the Baltic Exchange's benchmark assessment of 87.50 points for voyages to Asia.
Astro Carina, built in 2003, should normally cost more to hire than the benchmark because it's fitted with two steel hulls to cut the risk of an oil spill. The exchange's assessment is for vessels up to 15 years old, including single-hull tankers.
Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in US dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
Each flat rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
At 87.50 Worldscale points, owners of double-hulled very large crude carriers, or VLCCs, can earn about $53,098 a day on a 39-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine fuel prices.
Frontline Ltd., the world's biggest VLCC operator, said November 15 it needs $30,000 a day to break even on each of its supertankers.
Taiwan Maritime Transport Co Ltd, a Taipei-based shipper and trader of freight derivatives, hired three supertankers and wants more, expecting higher rental rates.
TMT hired the VLCCs Shinyo Navigator, Safwa and Maritime Jewel for 90 to 120 days at fixed daily rates, head of research T.C. Chang said by phone from Taipei. He wasn't able say how much TMT is paying or how many more tankers the company wants to hire.
Bookings for VLCCs sailing from the Middle East to Asia account for 47 per cent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP.