Rates Rising as Record Chinese Oil Imports Affect Ships: Freight
24 April 2012
, by Isaac Arnsdorf (Bloomberg)http://www.bloomberg.com/news/2012-04-23/rates-rising-as-record-chinese-oil-imports-affect-ships-freight.htmlExcerpt:Record Chinese oil imports are emptying the Atlantic Ocean of very large crude carriers and their 2 million-barrel cargoes, driving a rebound in rates for the smaller vessels left to supply the U.S. from West Africa
Suezmaxes, each holding 1 million barrels, will earn an average of $18,750 a day this quarter, 45% more than now, according to the median of six analysts surveyed by Bloomberg.
That’s 25% more than the $15,000 anticipated in forward freight agreements, traded by brokers and used to bet on rates, providing an opportunity for profit.
Shares of Nordic American Tankers Ltd., which owns 20 of the vessels, will rise 10% in 12 months, according to the average of eight forecasts.
China, which is importing 11% more oil than a year ago to expand stockpiles, is buying more from Nigeria and Angola as alternatives to supply from Iran, whose exports are plunging because of sanctions over its nuclear program. VLCC earnings jumped as much as 63% this year as the longer journeys and extra cargoes diminished a glut of vessels
Suezmaxes slid 56% in part because their carrying capacity made them more expensive for voyages from the Atlantic to the Pacific.
“VLCCs are getting picked up by China as much as possible, and Suezmaxes are still in the Atlantic to do business,” said Urs Dur, a New York-based analyst at Clarkson Capital Markets LLC, the investment-banking unit of Clarkson Plc, the world’s biggest shipbroker.
“The market is figuring out that this is a cheaper way of moving a million barrels to the U.S.”