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Tuesday, March 17, 2009

'Dismal' aframax rates at their lowest for 10 years

Liz McCarthy - Tuesday 17 March 2009

AFRAMAX rates in the Mediterranean have fallen to their lowest levels in 10 years as tonnage supply grossly exceeds available cargoes.
“Rates aren’t inspiring. It’s hard to remain optimistic,” said a London broker. 
The Baltic Exchange’s T11 cross-Mediterranean route had dropped to W70 by Friday, which Clarksons described as “dismal”. Rates slid even further over the last two days, to W68, or $10,200 per day, the lowest the Baltic Exchange has yet recorded in the Mediterranean market. 
Ships have ballasted over from the Caribbean, where the market has been poor, into the Mediterranean. 
“[We have] got an inquiry coming up in the next few days, and it’s not difficult to pick a ship because there are so many. It’s fairly well tonnaged, unfortunately,” said the broker. Looking forward, he said that owners were pessimistic about the market, but he thought rates had reached their bottom level as owners were unlikely to fix ships at much lower rates. 
Available fixture lists showed that some Greek charterers had booked aframaxes for as little as W65. 
Greece’s Avin International took the 96,099 dwt, 1992-built Ce-Wave from Sidi Kerir to Greece, with a March 20 loading date, for W65, and the 96,106 dwt, 1991-built Ce-Venture from Ceyhan to Greece also for W65, with a March 22 loading. 
“I wouldn’t take those fixtures as necessarily indicative of where the market is. They’re slightly lower, as they can take a slightly poorer quality ship,” said the London broker. “You have the market level and the Hellenic market, which is about five points below.” 
He added that oil majors such as Shell or BP were more selective when fixing ships and as a result paid slightly more. 
BP took two vessels with late March loading dates, including the 109,672 dwt, 2007-built Torm Margit from the Ceyhan terminal to the Mediterranean for W70. 
BP fixed the 105,000 dwt, 2008-built Maria Princess from Syria to the Mediterranean also for W70.
Geneva-based Riverlake Shipping put its cross-Mediterranean route rate down to W67.5 today, or $12,672 per day. The broker’s Black Sea-Mediterranean rate remained stronger, though, at W80, or $15,583 per day. 
Riverlake’s North Sea-UK Continent route remained flat at W75, or $15,505 per day, as it had done for the last week. 
However, the broker’s Baltic Sea-UK Continent route rate went up W7.5 today to W80, or $34,026 per day. 
“There was a little improvement in Primorsk because of the ice class tonnage. That’s the only market that remains not heavily overtonnaged and has the potential to be a little bit more overexposed,” said the London broker. 
Rates have also softened in the Caribbean this week. Following a surge in inquiry and a lack of available ships the Baltic Exchange’s TD9 route, from Puerto La Cruz to Corpus Cristi, reached W141 last Wednesday but had declined to W127 today, or $31,100 per day.

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