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Sunday, 04/26/2015 12:05:47 PM

Sunday, April 26, 2015 12:05:47 PM

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Home / Shipping News / Hellenic Shipping News / VLCC fixtures during first quarter increase to 542 vessels
VLCC fixtures during first quarter increase to 542 vessels
in Hellenic Shipping News 25/04/2015


The VLCC tanker market has enjoyed yet another positive first quarter, with Mcquilling Services recently observing in a relative analysis that the number of first quarter global VLCC fixtures has been increasing for more than five years and 2015 is no exception. According to the US-based consultants, “our proprietary fixture data showed approximately 542 vessels (530 in 1Q 2014) were chartered in the first three months of the year, 63% of which originated from the Arabian Gulf. West Africa continues to be a region of focus as light sweet crude that was once headed to the US is finding its way to China and India more frequently. Fixtures from West Africa to China are up roughly 18% year-on-year, while fixtures to India totaled nearly 70?.
Mcquilling added that “Latin America is another growing crude export hub, with Brazil leading the pack. The heavy crude produced in this region is increasingly being consumed by China as the Asian country continues to find ways to diversity its crude sources and its refining capacity complexity grows. According to Bloomberg, Asia-Pacific refiners are forecast to add 5.4 million b/d of capacity over the next five years and many of these plants are being built to process cheaper oils, which may spur demand for heavier crudes from Latin America. This is certainly an optimistic indicator for the VLCC segment going forward as the long-haul trip will likely have a positive impact on ton-miles”, it said.
The report also noted that “in the VLCC sector, the AG/Japan trade has averaged WS 60 or roughly US $58,000/day in the first three months of the year, while AG/USG averaged WS 33 or US $25,000/day. Meanwhile, WAFR/China averaged WS 59 or about US $56,500/day.
Looking at supply, there has been no net fleet growth in the VLCC segment so far this year as four ships have delivered to the fleet and four ships have been sold for demolition or conversion. We anticipate that the VLCC fleet will see a net fleet growth of 16 vessels in 2015?.
Meanwhile, in the Suezmax sector, Mcquilling noted that “global fixture activity increased in the first quarter by 5% year-on-year, with the bulk of the activity coming out of West Africa. There’s been an uptick in fixtures out of the Caribbean by 48%, most of which headed to the US Gulf and East Coast Panama, and out of the East Mediterranean by about 43% in 1Q 15 versus 1Q 14. Suezmaxes also found a lot of additional employment from the Black Sea to the Mediterranean by about 20 fixtures and West Africa to the Mediterranean by roughly 13 shipments. India’s continued thirst for crude oil has been evidenced by a 45% rise in fixtures from the AG to West Coast India in 1Q 15 versus 1Q 2014. Like China, India is also slowly beginning to diversify its imports from non-traditional sources like Latin America in order to begin easing dependence on traditional markets. We recorded two fixtures from South Brazil to West Coast India fixed in the first quarter and it will be interesting to see how this develops throughout the year. Spot rates on the WAFR/UKC trade have averaged WS 90 or US $43,300/day, while WAFR/USAC averaged WS 88 (US $43,400/day). The Black Sea/Med benchmark has averaged WS 98 or US $50,500/day. These rates, as shown in Figure 1 below, are trending much higher than year ago levels”, said Mcquilling.
It added that “with regard to Suezmax supply, there has been a net fleet growth of four vessels so far this year. We anticipate that the Suezmax fleet will expand by just five vessels in 2015.
In a turn of events, the Aframax sector has experienced a 19% decline in global activity in 1Q 15, driven by a decrease in fixtures out of the Black Sea, Caribbean and Arabian Gulf. The biggest decline out of the AG stemmed from fixtures to Singapore as they fell 81% in 1Q 2015 versus 1Q 2014. Fixtures to India declined 39% due to increased competition from the Suezmax segment. Despite the slowdown in activity, spot rates on the Caribbean/US Gulf benchmark have averaged WS 158 (US $46,700/day), up 8 WS points from the same time frame last year. Ullage and weather delays have been the main supporting factors behind the strong rates early in the year. The Cross-Med market averaged WS 119 or US $37,000/day.
The dirty Aframax fleet has grown by six vessels through the first quarter as eight additions were recorded and just two demolitions. We anticipate that this segment will see a net fleet growth of 16 vessels in 2015?, the company noted.
Mcquilling concluded that “like their larger counterpart, the Panamax segment also saw a decline in global fixture activity, but only by 4%. There was less loading activity out of Ecuador, the UKC and East Coast Mexico, while the Caribbean saw an increase of 46%. The Carib/USAC trade averaged WS 154 or US $29,300/day, while the Carib/USG route traded at a three-month average of WS 154 (US $31,000/day). Looking at supply, there has been a negative net fleet growth of two vessels and we don’t anticipate any dirty Panamax ships will deliver this year”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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