Next year, the benchmark oil carrier price depends on the price of fuel

This year's fuel prices continue to be high, with 380 cSt fuel prices remaining above $600, which will push the 2012 VLCC freight rate on the Middle East-Asia benchmark route up by 19%.

Although the Worldscale Association has not formally announced this data yet, fuel costs will be valued in the tariff negotiations. Therefore, shipping analysts expect the freight rate of oil shipments to increase significantly.

According to the latest analysis of McQuilling, a famous American brokerage firm, the benchmark freight rate for 2012 will be based on the average fuel price of 606.56 USD/ton.

In 2011, the benchmark oil price was calculated based on the average fuel price of 467.48 US dollars/ton, which means that the average fuel price in 2012 will increase by 30%.

In 2012, the Middle East-Asia TD3 benchmark route oil transport tariff W100, the corresponding freight rate paid by the renter is US$26.82/ton, which is higher than the freight rate of US$22.51 in 2011 and US$25 in 2009. Have risen.

McQuilling collected fuel prices between October 1, 2010 and September 30, 2011 as samples to assess the cost of freight in 2012. The Worldscale Association will also calculate this.

The assessment also included fluctuations in the cost of ports and canals as part of the calculation data, and based on the assumed speed of 14.5 knots, and made a reasonable assessment with reference to a large number of relevant factors.

According to the benchmark freight rate of 26.82 U.S. dollars per ton, the total freight paid by a 60-day voyage voyage for a 260,000-ton TD3 line VLCC in 2012 is about US$7 million, which is an income for shipowners signing the lease. Quite impressive.

However, in the spot market, the VLCC transaction price of this route was approximately W45 (equivalent to 45% of the benchmark freight rate). If the VLCC trades at the WS tariff, the cost of the tariff paid by the renter is only US$12.07/tonne.

The McQuilling report pointed out that a serious excess of capacity in the Middle East continues to squeeze shipowner’s revenues. The spot freight rate for this route in September was approximately W44.8 (TCE loss of US$730 per day), which is based on 14.5 knots and US$657/ton. The price of fuel is calculated.

The report pointed out: "In order to make up for the increase in the benchmark tariff, the WS spot tariff should accurately reflect the ship's supply situation."

“When we enter the 2012 threshold, ship owners will still find that they are always controlled by an invisible hand. The market will still stage a market that will only be driven by demand. At least this situation will continue until the end of next year because The integration of the shipping industry will take a long time to reduce the excess capacity in the market."

“Although the benchmark freight rates are on the rise, shipowners still need to be fully prepared to meet the challenges of the coming year.”

McQuilling expects the VLCC WS benchmark tariff to increase by 19% in 2012. Meanwhile, the Suezmax freight rate for Nigeria's 130,000-ton TD5 benchmark route will also increase by the same rate to US$21.08 per ton.

However, the Aframax tanker benchmark freight rate of the 7-million-ton TD9 service from the Caribbean Sea to the US Gulf was slightly inferior to the above routes, which was 16% (calculated at the W100 basis freight rate, equivalent to US$10.75/ton).

McQuilling's predictions are strikingly similar to those made by London-based brokerage Gibson in August this year. Gibson expects the long-haul benchmark freight rates to increase by 19%-21% in 2012 and short-term 12%-15%.

At the time, the broker also pointed out that the unlucky shipowners may not appreciate the sweetness of the benchmark freight rate increase, because their daily income is likely to be stretched.