Asian Aframax Tanker Rates May Decline on Lack of Cargoes

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Oct 2007

Asian aframax rates may fall from a five-week high because of a lack of demand for tankers that move 80,000 metric tons of oil. ''Charterers have been actively working on their November shipments both from the Persian Gulf and Indonesia'' last week, London-based shipbroker Galbraith's Ltd. said in an Oct. 26 report. ''However, the trend has not firmed much with plenty of available vessels. The market could be erratic.'' The aframax rate from Kuwait to Singapore, the world's fourth-busiest route for such vessels, rose 0.2 percent to Worldscale 121.04 on Oct. 26, according to data from the London- based Baltic Exchange. That's the highest since Sept. 18. Shipping a ton of fuel on the route costs $11.71, according to Bloomberg data. About 20 to 30 aframaxes are waiting to load cargo in Singapore from now to mid-November, shipbrokers said. Three aframaxes, capable of moving a combined 301,668 tons of cargo, are scheduled to arrive in Singapore next week, from this week's eight, which are able to move a total of 793,937 tons, according to Bloomberg data.  A ''lack of activities'' may keep the rate for the Kuwait- Singapore route steady, Katsunori Nishikawa, general manager for chartering at Matsui & Co.'s shipbroking division, said by telephone from Tokyo today. The surge in crude oil prices to a record above $93 a barrel in New York is unlikely to affect demand for aframax tankers. While shipowners' bunker cost will rise, charterers may be reluctant to pay higher charter rates, shipbrokers said. Southeast Asia is the world's busiest aframax market after the Mediterranean. The Caribbean is the third busiest. The rates above are in Worldscale points, which are a percentage of a nominal, or flat rate, for a specific route. Flat rates, quoted in U.S. dollars a ton, are revised yearly by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.