Americas Aframax freight spikes close to 110% on export drive, floating storage

Freight for the Americas inter- and intraregional Aframax runs spiked 109.5% week on week, as an extensive number of cargoes were put out simultaneously on the East Coast Mexico-US Gulf Coast and USGC-UK Continent/Mediterranean routes, while ship owners were looking at higher opportunity earnings in a firm Mediterranean market and an increasing number of floating storage inquiries offshore the USGC.

“I think charterers held back a little too long last week, hoping the rates would collapse more, which they did, they went pretty low, but charterers started getting tired, so all the cargoes came out at the same time, and then owners have more flexibility to argue higher rates,” a ship owner said. “Also, lots of ships going off for storage, for about a year,” he added.

Freight for the USGC-UKC/Med runs spiked 115.8% on the week to w205 or $41.78/mt Thursday from w95 or $19.36/mt last Wednesday, while the cost of carrying 70,000 mt cargoes on the ECMex-USGC route more than doubled to w220 or $11.73 /mt” from w105 or $5.6/mt last week, according to S&P Global Platts data.

Owners’ expectations during that week were that rates would rise near the end of the month, and therefore, they were more willing to cover local cargoes. Charterers, on the other hand, preferred to wait before covering their cargoes in the hopes that rates would fall further as the end of April neared.

Since the week’s start Shell booked the Briolette at w105 for the USGC-UKCM route loading Apr28-29 and P66 placed the Minerva Eleonora on subjects for the same route at w160, loading April 27-28 before Vitol took the Bonita for the USGC-Baltic route at w190, with an option to the UKC/Mediterranean at w195, Platts fixture logs show. A deal done by Suncor for the East Coast Canada-USGC route at w230, with an option to the US Atlantic Coast at w250 caused panic in the market and shifted sentiment very much in a bullish direction. Fixtures for the ECMex-USGC trip followed a similar upward trajectory, with Exxon taking an AET to-be-nominated ship at w205 for an April 26-27 laycan, Wednesday the last done deal on the upcoast market.

On the floating storage front charterers have been heard bidding Aframaxes for 30-180 day storage plays at $45,000/day or at $90/mt for 180 days basis 90,000 mt stored, which compares favorably to 180-day floating storage negotiations for VLCCs at $140,000/day or $93.33/mt basis 270,000 mt stored. 180-day floating storage for Suezmaxes was heard at $61,000/day or $84.46/mt per 180 days basis 130,000 mt stored Thursday, with Unipec taking the Ridgebury Pallas at that level for a 6-month period.
Source: Platts