Oil tanker rates could rebound on China uptick

Rates for very large crude carriers (VLCCs) on key Asian routes could recover next week if chartering activity rises with China's return from the Lunar New Year holidays.

"The tonnage list is quite balanced so if we see an increase in chartering activity rates will increase," said one Singapore-based VLCC broker yesterday.

"A lot depends on Chinese activity," the broker said.

"The market is soft primarily because of low cargo volumes," the broker added.

Supertanker rates from the Middle East and West Africa are at their lowest since November 20 after falling by between five and eight points on the Worldscale measure since February 23 on the back of lower chartering activity due to Lunar New Year, Reuters freight data and ship brokers said.

About 36 to 40 very large crude carriers fixtures have been concluded for loading in the first 10 days of March, shipping brokers said.

That suggested a further 80-90 charters need to be fixed to complete March's fixture programme based on chartering activity in the last six months.

VLCC rates for the benchmark route from the Middle East to Japan were around W53 on Thursday, although owners were pushing for slightly higher numbers yesterday, brokers said.

Rates for West Africa to China were at W55 on Thursday, although Unipec paid W56 to charter the 318,325 dwt (deadweight tonne) Leonidas.

In other trades, rates for 80,000-tonne Aframax tankers from Southeast Asia to East Coast Australia dropped to W101 on Thursday after falling from W102.5 on February 20.

Rates appeared to have plateaued although they are the lowest since mid-November, according to Reuters freight industry data.

Clean tanker rates from Singapore to Japan were W117 on Thursday, continuing to rebound this week on tighter tonnage supply.

"I think North Asia rates will pick up further," a Singapore-based clean tanker broker said yesterday.