VLCC rates sail into uncharted waters

Singapore

RATES for very large crude carriers (VLCCs) on key Asian routes face a mixed outlook next week with charterers keen to cap this week's rate increases, while owners want to push the market higher, brokers said. "Rates have legs to go further but I don't see a massive spike," said one Singapore VLCC broker on Friday. "Charterers are cooling it off - putting the brakes on to stop VLCC rates rocketing through 70 (on the Worldscale measure). Owners smell blood, so the market could go either way," the broker said.

That came after an expected lull in chartering activity early this week failed to materialise. Instead there were more than 20 Middle East-Asia fixtures for July loading which pushed rates higher, according to brokers and Reuters freight data. "The move from working June stems to July stems was seamless and no quiet spell at all," Norwegian ship broker Fearnley said in a note on Wednesday.