- The West African Suezmax market saw a significant increase in freight rates and activity levels on April 10, attributed to a firming US Gulf-UK/Continent route, a rush to fix cargoes for late-April laycans, and a tighter supply of vessels in position.
- Nine Suezmax fixtures were reported for loading in the region, reflecting the increasing market activity.
The West African Suezmax market experienced a sharp rise in freight rates and activity levels on April 10. Shipbroker sources attributed this surge to a firming US Gulf-UK/Continent route, a rush to fix cargoes for late-April laycans, and a shorter supply of vessels available for the specified dates.
Rising Freight Rates
Freight rates firmed up throughout the day, with rates jumping from w115 for a Nigeria-Spain voyage reported in the morning to w125 for a Kribi-UKC/Mediterranean run just before the Platts Market on Close cut-off point. Platts assessed freight on the 130,000 mt WAF-UKC route, excluding EU Emissions Trading Scheme charges, at $20.30/mt on April 10, up from $17.81/mt the previous day.
Support from US Gulf Market
Market sources noted support from a strengthening US Gulf market, with a Suezmax broker commenting that “the US Gulf market is booming, and the list is tightening.” Another broker remarked, “The market’s on fire — it’s a great time to be an owner.”
Rise in Reported Fixtures
Nine Suezmax fixtures were reported for loading in the West African region on April 10, marking a substantial increase in activity from a relatively slow period in recent weeks. Three of these fixtures had discharge destinations in Southeast Asia or the Far East, traditionally recipients of VLCC shipments.
Impact of Firming US Market
The firming US market impacted the Suezmax market, with freight for an Aframax carrying crude oil from the US Gulf Coast to the UK Continent jumping to $48.67/mt on April 10, excluding EU ETS costs. This large increase in freight bolstered sentiment for Suezmax owners, with two trades done at the w105 level, both inclusive of EU ETS costs.
While Aframaxes remain the more expensive option compared to Suezmaxes, the availability of VLCCs in the US Gulf and Venezuela may shift preference toward larger ships. A shipowner noted, “[Suezmax rates] are probably going to top out with a few VLCCs on subs.”
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Source: SPGlobal
