Asian Product Tanker Rates May Fall on Holidays, Ship Supply

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

28 Sep 2007

Asian rates for long-range oil- product tanker rates may fall for a fifth week as bookings slow because of holidays and the supply of ships outpaces cargo available for loading. The cost of transporting 75,000 metric tons from the Persian Gulf to Japan fell 4.4 percent to Worldscale 140.84 last week, according to the London-based Baltic Exchange. Long-range tankers can carry between 45,000 tons and 160,000 tons of cargo. Hiring rates for oil-product tankers have fallen since August on increased availability of ships. Chartering demand may decline amid holidays in the region. Markets in Japan are closed today, Hong Kong on Sept. 26 and China from Oct. 1 to 5. Markets in South Korea, Asia's fourth-largest oil refiner, are shut from Sept. 24 to 26 for Thanksgiving. ''Optimism is limited,'' London-based E.A. Gibson Shipbrokers Ltd. said in its weekly report. ''All East markets are expected to remain slow due to holidays in both Korea and China.'' Expectations of lower gasoline shipments from China, Asia's largest exporter of the product, and tighter supply in the domestic market have kept tanker rates low. Long-range 2 tankers, also known as LR2s, ''have seen a number of fixtures but there is still an abundance of tonnage and rates, accordingly, have dropped,'' E.A. Gibson said. A LR2 can transport 80,000 tons to 160,000 tons of products. A long-range 1 tanker, also known as LR1, can carry 50,000 tons to 80,000 tons of oil products and is able to pass through the Panama Canal.  A single 74,999-ton oil-product tanker is scheduled to arrive in Singapore this week compared with seven last week, capable of transporting 406,603 tons of cargo, according to Bloomberg data. China cut overseas sales of gasoline to a 10-month low in August and increased imports to meet rising summer demand. The Chinese government has ordered China Petroleum & Chemical Corp., the nation's largest refiner, and PetroChina Co., the country's biggest oil company, to boost fuel imports, production and distribution to end shortages caused by increased travel during the summer.  Still, a 1.3 percent drop in Japan's oil inventories may stem a decline in tanker rates. Oil stockpiles in Japan fell to 15.2 million kiloliters (129.5 million kiloliters) last week from 15.4 million a week earlier, the Petroleum Association of Japan said Sept. 20. Gasoline supplies fell 25,707 kiloliters to 1.85 million while kerosene stockpiles dropped 61,150 kiloliters to 4.18 million kiloliters.