September 21, 2020

Tight Caribbean VLCC market attracts ballasters from Red Sea, Asia

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Ballast-Water-ManagementFrom Marasi News

Recent strength in the Caribbean VLCC market, despite weakness in the Persian Gulf and West Africa markets, has attracted several ballasters to the Americas, even a rare one from the Red Sea, market sources said this week.

Reliance has fixed the 321,225 dwt Blue Aquamarine, which was heading to the Red Sea from the Persian Gulf, to load a crude cargo from the Caribbean on February 27 and go to West Coast India.

“[This is a] first, at least in the last five years, a ship ballasting from the Red Sea, to load in the Caribbean, and going back to India,” a US shipbroker said.

Vessels in the Red Sea typically ballast to West Africa or the UK Continent.

According to cFlow, Platts trade flow software, the Blue Aquamarine arrived at Ain Sukhna in Egypt February 2 and is remains there. The typical voyage time from Ain Sukhna to the Caribbean is 16-17 days.

Sources also said this week that a new built vessel was ballasting straight from a yard in North Asia to the Caribbean.

“When owners will ballast straight from the yard to the USGC/Caribbean from the Far East, you know the market is hot,” said the US broker.

Broking sources in Asia said Glasford, PetroChina’s shipping arm, is ballasting from North Asia a recently built ship, the Junin, to the Jose terminal in the Caribbean.

According to cFlow, the 320,840 dwt Junin, which was built in January 2015, left Singapore January 26 — after arriving there from a yard in China — and was last observed traveling unladen in the Indian Ocean. It is expected to arrive in Jose on March 6.

Broking sources in Asia said Glasford is likely ballasting the vessel to the Caribbean to load its own cargo.

A ship ballasting from Singapore to the Caribbean to load a cargo for China can earn almost $67,000/day, compared with daily earnings of around $50,000 on a Persian Gulf-to-North Asia route.

PetroChina currently has a requirement to move a VLCC cargo on a Caribbean-East voyage, loading March 5-10, according to sources.

The Caribbean VLCC market has been on an upward trajectory since the latter part of January, even as markets in the Persian Gulf and West Africa wilted.

The Caribbean-Singapore route, basis 270,000 mt, hit a high of $8.05 million on January 30, the highest it has been since Platts started assessing the route in November 2013.

“There isn’t enough ships [in the Caribbean], and owners can do whatever they want … the cargoes have to move, and therefore it is up the owner what they want to fix at, regardless of what the AG is doing,” the US broker said.

The Caribbean-Singapore freight rate has since eased to $7.6 million Thursday, but remains at lofty levels.

“The market has come off a bit, but earnings are still over $100,000/day so it’s still pretty strong,” the broker said. “There have been a number of vessels ballasting to the Caribbean recently and that persuades other owners around the world to do the same … so yes, you’ll start to see more competition and that could push the market lower, but it’s not likely to be much lower than this,” he added.

Limited loading opportunities in the UK Continent and high freight rates on offer in the Caribbean have combined in recent weeks to attract ballasters from UKC to the Caribbean, Europe shipping sources said.

One example is the 320,000 dwt British Venture, currently ballasting to Venezuela from Germany, according to cFlow. That ship has been fixed by PetroChina to load a cargo in the Caribbean on February 18, with options to discharge in Singapore or China.

“The position list in the UKC is now very short, with around four VLCCs available for February,” said a European shipbroker. “The Caribs has been quite firm which has attracted some ships from the UKC.”

The firm Caribbean market has also kept rates high in the UK Continent, despite a lack of activity in that region. Shipping sources have said it costs between $800,000-$1 million to ballast from the UKC to the Caribbean, so shipowners will usually opt to ballast to the Caribbean if Rotterdam-Singapore freight rates are more than $1 million below Caribbean-Singapore rates. Platts assessed rates on the UKC-Singapore route, basis 270,000 mt, up $150,000 at $6.6 million on Thursday. The Caribbean-Singapore route, basis 270,000 mt, was assessed at $7.6 million.

Ships free in South Africa are also finding it remunerative to ballast to the Americas. One example is the Seeb, which was free in Durban after arriving there January 31, after being fixed by Petrobras on January 30 for a Brazil-China voyage, loading February 16.

IMAGE: Ballast-Water-Management

For more on this story go to: http://www.marasinews.com/en/portfolio/tight-caribbean-vlcc-market-attracts-ballasters-from-red-sea-asia/

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