Market activity picks up again with the return of Chinese traders from holiday
Rates for dirty tankers on key Asian freight routes are expected to rise over the next week as spot market activity picks up again with the return of Chinese traders from holiday.
In the clean tanker market, rates are also seen higher due to record high bunker fuel prices in Asia, ship brokers said.
Rates on the benchmark very large crude carriers (VLCC) from the Middle East to Japan rose to W65.10 on Tuesday from W58.10 last week as refiners ramp up imports due to cold winter weather in the northern hemisphere. Rates have risen more than 30 per cent since Jan 3.
‘The winter weather that has taken over most of the northern hemisphere has been the source for much optimism,’ said Greek broker Intermodal.
‘Although there is little evidence that this can last long, we may well see even firmer activity in the coming days as Far Eastern traders return from their Lunar New Year festivities.’
China’s crude oil imports from Saudi Arabia rose 9.56 per cent in December last year compared to a year earlier to 1.12 million barrels per day, the fourth highest on record on a daily basis, Chinese customs data showed, as the world’s top oil exporter pumped just under the 10 million bpd mark.
The Baltic Exchange’s rate for 260,000-tonne crude tankers from West Africa to China climbed to W65.50 from W62.80 last week.
Rates for 80,000-tonne aframax tankers from South-east Asia to East Coast Australia edged up to W90.50 from W89.72 last week.
Clean rates for Long Range (LR1) tankers on the benchmark TC5 Middle East to Japan route surged to a 2012 high of W105.18 on Tuesday from W98.77 last week, driven by rising bunker fuel prices. The market has risen more than 5 per cent since Jan 3.
‘Rates are going up mainly because of higher fuel costs, not necessarily due to an increase in freight demand,’ said a Singapore-based ship broker.
Fuel oil prices in Asia have held at record highs for nearly three months, with the front timespread peaking to a backwardation of nearly US$20 a tonne and cash differentials breaking all-time highs at premiums of US$10-20 in the past three to four weeks.
In the intra-Asia market, medium range (MR) tankers travelling from Singapore to Japan eased to W120.29 on Friday from W121.21 the previous week. The Baltic Exchange’s rate for South Korea to North America’s West Coast fell to W29.54 on Friday from W29.64 the previous week.
Source: Reuters
