The first fixture of the year in the Americas using Worldscale 2017 rates sent the Aframax market into a tailspin as positions lists grew and cargoes were harder to find.
Chevron put The Grimstad on subjects loading a 70,000 mt cargo on a Bullen Bay-USGC run with January 12-13 dates. The ship was booked, using using Worldscale 2017 rates, at w145, a 30.6% day-on-day drop.
“There are a lot of ships, little cargoes, and scared owners,” a source said. No fresh cargoes were seen the day on day.
An industry source added the owner would make $400,000 less than an earlier fixture done at w145 basis Worldscale 2016 on the same run.
Aframax rates had been bolstered by fog delays in the Gulf Coast and the subsequent closure of the Houston Ship Channel at the end of the last year but as the weather cleared in the new year more ships were available for booking.
“Itineraries are more certain, basically more ships are available to be worked,” said a market participant.
There were eight bids for the Chevron cargo, according to a source close to the deal, showing how competitive the market had become.
Although available vessels and available cargoes were imbalanced, some still could not rationalize the fixture with one broker describing it as an “unreal deal for Chevron.”
“It doesn’t make sense to me,” he added.
Did you subscribe for our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Platts
