VLCC Rates for Key Asia Route Down 44% in 2016

by Ship & Bunker News Team
Friday January 15, 2016

While the plummet of dry bulk rates continues to make headlines, Platts reports that Asian very large crude carriers (VLCC) rates this week dropped 11 Worldscale points to a cumulative 2016 decline of w53.25.

Included in the total is the all-important Persian Gulf to Japan route: the rate for a 265,000 metric tonne cargo has slumped by over 44 percent in the first eight trading days of 2016, from 119.25 Worldscale points to w66.

"The market is dropping so quickly, much faster than I expected; there are three to four newbuild VLCCs and many owners are keen on one cargo, so the market is very competitive," an unnamed VLCC shipowner was quoted as saying.

He added that given the high number of vessels remaining, "It might take some time for the market to rebound."

The rates cuts are being described as a "bloodbath" and owners are reportedly under pressure as charterers expect a further discount on rates.

It was a dramatically different story only three months ago, when in October media reported that VLCC rates on voyages on the Persian Gulf to East Asia voyages had reached a five-year high at $100,000 per day.

Ship & Bunker News Team
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