Cargo uptick fails to push aframax market out of stupor

Totonno Bottiglieri was fixed out to Brightoil at a rate of only $9,500 per day. Dietmar Hasenpusch

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Asian time-charter deal at $9,500 per day fails

EVEN with more business being concluded in the cross-Mediterranean spot market this week, aframax rates failed to budge as an oversupply of ships immediately absorbed any cargoes coming onto the market.

As a result, the Baltic Exchange’s benchmark Ceyhan to Lavera route barely moved, reaching W83.18 on Tuesday, equivalent to daily time charter earnings of $5,407.

The benchmark has been hovering in the W80 to W90 band for three weeks now, and other aframax markets have been similarly anaemic.

The Baltic Sea trade, another major European aframax market, has been moving between W70 and W80 for more than a month, reaching W75.00 on Tuesday, equivalent to time charter earnings of $9,849 per day.

Still, brokers said the the Mediterranean market was seeing more action in terms of trade than it had in recent days. However, a London-based broker reported that several cargoes coming to market on Tuesday failed to make a dent in rates as more than half a dozen vessels came out to bid on the trips.

“Any time you have a cargo in the market and you get more than three or four bidding for it, that’s an indication it’s not going to well,” the broker said.

The period of time between fixing ships and them loading has grown quite short in recent months, as charters have grown assured there will always be at least several vessels open to take their cargoes. Vessels are now commonly being fixed only a week before loading as they are waiting for cargo in the market.

Brokers active in the Mediterranean market said that it was likely that rates would trend downward somewhat over the coming days. One noted charterers were offering rates on cross-Mediterranean voyages below W80 at the moment , “which had been the bottom in recent days,” according to the broker.

A worrisome time charter at rock-bottom rates was reported from Singapore. According to one aframax broker, RBD Armatori’s 2010-built, 108,871 dwt Totonno Bottiglieri, which was open here, was fixed out to Brightoil for seven to 30 days at a rate of only $9,500 per day. This is barely above the $8,359 shipping accountant Moore Stephens listed as the operating cost of an aframax in 2010.

However, according to later reports the deal failed on subjects.

One London broker reported that Shell had recently extend a time-charter for an aframax vessel open in Europe at a rate of $10,500 per day for a period of three months.

However, he pointed out the oil major had exercised an option agreed to earlier.

The going rate for 3-month period charters was still around $12,000 per day, he assured.

 

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