The rate to transport 80,000 metric tons of fuel from Kuwait to Singapore dropped 6.9 percent to Worldscale 220.42 yesterday, according to the London-based Baltic Exchange. That's the biggest one-day decline since Jan. 3, 2006.
Aframax rates on the Middle East-Singapore route have fallen 25 percent since the end of last year. Shipping a ton of fuel on the route costs $22.43, based on Bloomberg data.
``The build-up of tonnage is the main concern, and a substantial boost in enquiry levels is needed to turn things around,'' Oslo-based analysts Henrik With and Glenn Lodden at DnB NOR Markets, said in their weekly report. ``Sentiment for suezmaxes and aframaxes is quite muted.'' A suezmax can move one million barrels of oil.
The demand for supertankers, also known as very large crude carriers or VLCCs, will influence the market for aframaxes, according to Matsui & Co.'s Katsunori Nishikawa, general manager for chartering at the Tokyo-based company's shipbroking division.
Freight rates for supertankers on the benchmark Persian Gulf-to-Japan route have fallen 31 percent since end-2007, according to data on the Baltic Exchange. Rates on the route slumped 16.5 percent to Worldscale 191.47 yesterday, according to data on the Baltic Exchange.
Two aframaxes, capable of moving a total of 211,778 tons of cargo, are so far scheduled to arrive in Singapore next week. That compares with five aframaxes with a combined capacity of 538,257 tons arriving in the city state this week, according to Bloomberg data.
The following is a table of rates to charter smaller tankers capable of carrying less than 1 million barrels of crude oil or oil products on Asian routes as of Jan. 8, according to the Baltic Exchange.
The above are in Worldscale points, which are a percentage of a nominal, or flat rate, for a specific route. Flat rates, quoted in U.S. dollars a ton, are revised yearly by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.
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