VLCCs ‘close to a perfect storm’: Fearnleys

Norwegian broker Fearnleys has described the VLCC chartering market as being “close to a perfect storm” in the past week.

In its latest weekly report, Fearnleys cited very strong demand in all areas, falling bunker prices and looming typhoons in Asia for reasons for the sudden optimism in what has been a topsy-turvy world for VLCCs this year.

“MEG eastbound rates have gained upwards to 10 points, with West Africa/East following suit, and to an extent leading the way – now firmly established in the mid WS50s. USG export freights have similarly strengthened, now said to have reached USD 6.5 for the benchmark Koreas destination, although yet to be confirmed,” Fearnleys reported.

The only cloud on the horizon, according to the Oslo broker, has been a number of oil company relets boosting an otherwise thinning supply side.

Nevertheless, a bullish Fearnleys said it saw little downside risk short term.

“Whether this is the start of the long anticipated paradigm shift remains to be seen, but for now owners are making the most of daily earnings not seen for a long time,” the broker concluded.

London brokers Alibra Shipping noted yesterday that there has been interest in shorter periods, with one-year VLCC rates going for around $31,000 a day.

Most other broking reports this week have been less sanguine about VLCC prospects with many suggesting the market is actually getting softer.

“Fearnleys must have some big clients with ships open. John Fredriksen?” confided one Asian broker to Splash.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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