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May 28, 2018

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Dirty Tankers East of Suez Commentary

New York (Platts)--02Jan18/0745 pm EST/ 0045 GMT

The year started off on a quiet note for the East of Suez tankers as many market participants were away from their desks on year-end holidays Tuesday. For the Asian VLCC tankers, sentiment was largely unchanged as activity was expected to pick up in the coming days as charterers returned after the new year holiday period. "The VLCC market is at the same level as last Friday, and this week will be more active that last week so we might see a slight uptick in rates, but vessel supply is still close to a surplus of 30 vessels by the end of the second decade of January," said a charterer. Sources said the main chartering activity was currently for the January 15-20 loading period. According to a broker, the total number of VLCCs on the water was currently 748, and another 46 vessels were scheduled to be delivered this year. The key VLCC PG-Japan rate was assessed at w43.5 basis 265,000 mt Tuesday, based on 2018 Worldscale flat rates. On the Suezmax segment, activity was sparse and the market was largely unchanged. The Suezmax PG-East rate was assessed at w73.5 basis 130,000 mt, and the PG-UKC rate was assessed at w31.5 basis 130,000 mt Tuesday, both based on 2018 Worldscale flat rates. Few fresh fixtures were heard for the Asian Aframax markets on the day, said sources. Market sources said there was some activity in the North Asia region for Kozmino cargoes loading around mid-January. "[Aframax] ships that went off to the PG seem to be fixed away and a lot of ships took off [from Indonesia] to PG over Christmas so that will have an impact in the market," said an Aframax shipowner. Shipowners said that high bunker prices were decreasing their returns, and would keep a check on rate levels. The key Aframax Indonesia-Japan voyage was assessed at w89 basis 80,000 mt and the Aframax PG-East rate was assessed at w94 basis 80,000 mt Tuesday, both based on 2018 Worldscale flat rates.


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