Asian hiring rates for oil-product tankers may extend their decline after falling to the lowest in three months as the number of ships vying for business rose on reduced cargoes after China's snowstorms. Benchmark hiring rates for a ship that can carry 75,000 metric tons of oil products, a large-range 2 tanker, on the Middle East to Japan route dropped 1.8 percent to Worldscale 146.46 yesterday, based on data from the London-based Baltic Exchange Ltd. The rate on the Singapore to Japan route for a medium-range tanker, capable of carrying 30,000 tons, fell 0.5 percent to Worldscale 184.58.
Rates for product tankers plying Asian routes have declined an average of 27 percent since the start of the year as chartering slowed after oil companies stockpiled kerosene and other fuels before the Northern Hemisphere winter. The Lunar New Year holidays, which run from Feb. 6 to Feb. 12, and the heaviest snowstorms in five decades that swept China in late January also hampered fuel shipments.
"As a result of potentially subdued trade from China due to the massive snow falls, in addition to elevated competition between ship owners to secure employment as vessel availability is bloated, it is uncertain whether transportation rates will see a bounce," Oslo-based Henrik With and Glenn Lodden, analysts at DnB NOR Markets said in their Feb. 12 report.
Tokyo-based Matsui & Co.'s shipbroker Arata Uga said there's currently no rush by companies to charter product tankers in Asia due to the increased availability of vessels.
"With plenty of relatively prompt tonnage and little activity, we expect that things will remain soft for some time to come," Oslo-based shipbroker Fearnleys AS said in a Feb. 13 report.
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.
