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Monday, December 11, 2017

Only 41% of VLCC voyages fixed on spot market

Through its tanker tracking database, Norwegian tanker broker Fearnleys has studied all VLCC shipments effected during 2004 and 2005 - in total some 7,200 laden voyages. 80% of these voyages starts in the Arabian Gulf - about 5,800 voyages. The challenge for operators has been to take advantage of the remaining 1,400 voyages in order to reduce ballasting.

According to London-based broker Clarksons, VLCC spot fixtures in 2004 and 2005 were totally 2940:

 

2004

2004

2005

2005

AG - West

408

26%

276

21%

AG - East

768

48%

684

51%

AG - RS

36

2%

36

3%

Others

384

24%

360

27%

Total

1596

100%

1344

100%

Spot fixtures as reported by Clarksons thus represent some 41% of the total number of voyages tracked by Fearnleys. Assuming equal voyages, one may also assume that about 41% of the VLCC fleet has been on the spot market - or some 202 VLCCs.  There are currently some 160 single hull VLCCs. Most of these are on the spot market and  would compete at the end of the queue.  The relatively low number of VLCCs in the spot market, and the competition for double hull VLCCS, may be one reason why the VLCC WS rates AG-Japan mid May were higher than the suezmax rates Africa-US.  The VLCC market has been exceptionally strong compared to the rest of the tanker market.

Spot fixtures as reported by Clarksons thus represent some 41% of the total number of voyages tracked by Fearnleys. Assuming equal voyages, one may also assume that about 41% of the VLCC fleet has been on the spot market - or some 202 VLCCs.  There are currently some 160 single hull VLCCs. Most of these are on the spot market and  would compete at the end of the queue.  The relatively low number of VLCCs in the spot market, and the competition for double hull VLCCS, may be one reason why the VLCC WS rates AG-Japan mid May were higher than the suezmax rates Africa-US.  The VLCC market has been exceptionally strong compared to the rest of the tanker market.

Contact: Erik Ranheim