Freight rates for Aframax and Panamax vessels in the Americas climbed Worldscale 22.5 and w12.5 Tuesday as delays in the US Gulf Coast amid Tropical Storm Gordon closed off tonnage availability.
A mixture of port closures to the east of Louisiana and the inability of ships to make desired laycans due to bad weather is causing position lists to tighten, sources close to the market said.
The Panamax segment saw the most dramatic jump in rates, after S&P Global Platts assessed freight for the Caribbean-USGC run at w142.5, up w22.5, or 18.75% day on day. The cost of the route was last assessed higher on January 3 at w145, according to Platts data.
The Pleiades was placed on subjects by an unnamed charterer to make an upcoast voyage from the Caribbean at w142.5. Similarly, Marathon placed the Nestos on subjects for a Santo Tomas-USGC voyage, set to load on September 9-11. Most sources close to the market believed the vessel was booked at w142.5.
Rates for Panamax vessels making short-haul voyages were relatively rangebound in August, staying within a range of w117.5-w125, moving only slightly with fluctuations in cargo inquiries.
The cost of carrying dirty products on Aframax vessels also rose Tuesday, continuing its climb, with Platts assessing rates w12.5 higher for most upcoast and trans-Atlantic routes, and East Coast Mexico loaders moving w15 higher.
ExxonMobil replaced a deal done late last week for a East Coast Mexico-USGC run with a September 6-8 laycan by booking the Grimstad at w160.
Platts assessed freight for the East Coast Mexico-USGC route at w157.5, last assessed higher on December 12, 2017, at w165, taking into account the promptness of the ExxonMobil replacement deal and holding voyages originating in the Caribbean at a w2.5 premium.
Ports east of Louisiana have already seen complete closures, including Mobile, Alabama, and Pascagoula, Mississippi. The major Louisiana Offshore Oil Port and ports of Baton Rouge and New Orleans are not closed as of now, but are continuing to monitor the storm.
The Aframax market has been strong over the past several weeks as tonnage remains thin amid an active trans-Atlantic export schedule and increased lightering demand.
Smaller vessel classes are not new to volatile rate movements as Aframax and Panamax availability fluctuates with the shorter regional voyages.
One shipbroker pointed to the middle of the month, specifically September 13-14 dates, for rates to weaken as ships begin to open up.
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Source: S&P Global