In International Shipping News 06/08/2016
Source: Platts
The key regional Asia Aframax freight rate hit a seven-year low this week, on lack of demand due to refinery maintenance in the Far East.
Market participants said the massive slowdown in activity along with high competition among owners for cargoes due to excess tonnage has caused the rates to equal levels seen last in 2009.
The rates took a dive with two fixtures heard done on modern vessels at 75 Worldscale points, breaking the psychological barrier of w80 on the Indonesia to North Asia route.
Previously, rates below w80 for voyages loading in the region were heard only for compromised vessels.
“I can’t believe w75 [for Aframax Singapore-North Asia] has been done, that is now the market — the other segments like VLCCs have dropped too,” said an Aframax shipowner.
Another shipowner said 10 Aframax newbuilds have entered the market this year out of a total of 24 slated for delivery by the end of 2016.
Vitol placed the Signal Puma on subjects for a Singapore-North Asia voyage, loading mid-August, at w75 basis 80,000 mt, confirmed a source aware of the matter. And NPI was heard to have placed a Teekay vessel on subjects for a Singapore-North Asia voyage, loading August 15, at w75 basis 80,000 mt.
Platts assessed the Aframax Indonesia-Japan rate down w6 to w75 basis 80,000 mt, or $8.32/mt.
The record low for the Aframax Indonesia-Japan assessment was touched in 2009 when rate levels ranged around $7.30/mt, on April 13 and 14 that year, showed Platts data.
According to industry estimates, an Aframax doing a Indonesia-South Korea voyage at w77.5 would see an expected time charter earning equivalent of about $11,000 per day.
Source: Platts
