Aframax freight rates swelled Wednesday as a fixture and a shortening position list pushed them up Worldscale 37.5 day on day.
“Everything is on subjects,” said a market source about Aframax availability. “The list is pretty cleared out now.”
A tonnage list showed nine Aframaxes with firm availability through February 26 in the Gulf of Mexico and 13 in the Caribbean through February 28.
The rate slowly built up Wednesday as fixtures were reported on the Caribbean-US Gulf Coast run at w110, w112.5, w115 and w122.5 with third decade February loading dates.
As tonnage was heard to be clearing out quicker than expected, according to sources, Chevron booked a ship at w147.5, causing the market to “pop” for the ships, said an industry source.
The Venice was on subjects to Chevron for a Jose-USGC voyage with February 23-25 loading dates. There were only six open ships that could take the cargo, three of those arriving prior to her load window.
Market participants speculated that shipowners would be hard pressed to leave the Caribbean market as owners were heard to be working off the w147.5 figure.
“I don’t see anyone leaving the Caribs right now unless they need to,” said a shipbroker.
Asked if owners would reverse the trend of ballasting away from the Americas to get into the sizzling Caribbean market, a shipping source said, “owners will be ballasting that number.” Another source added, “at these levels, yes.”
Others attributed the run up to the cyclical nature of the shipping industry, speculating with the list being cleared out, the ships would all come open around the same time causing future rates to plummet.
“I mean it will be up, then all the ships open at the same time again,” the market source said. “So, up we go then down we go.”
The outlook for the rest of 2017 would bring more of this up and down cycle, the source went on to say.
“I feel like we will see up and down swings the whole year,” he said.
Did you subscribe for our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Platts
