- CPC-Med Suezmax rate dips by w10 on day
- Sentiment softens amid lower volumes, higher tonnage supply
- CPC grade differential to Dated Brent at four-year high
Freight rates for Suezmax voyages loading in the Caspian Pipeline Consortium (CPC) and discharging in the Mediterranean saw a substantial decline by July 17. This drop is attributed to lower projected cargo inquiry levels for August, a buildup of tonnage in the region, and pressure from softness in adjacent markets, reports SP Global.
Black Sea Suezmax freight
Platts, part of S&P Global Commodity Insights, assessed freight on the 135,000 mt CPC-Med route at w105.25, down w10 on the day. While the key West Africa-UK/Continent Suezmax market experienced significant drops at the start of July, CPC-Med Suezmax rates remained relatively stable until mid-July. However, on July 17, shipbrokers revised their rates downwards, citing a fixture settled at w105 for a 135,000 mt cargo loading in CPC and discharging in UKC/Mediterranean.
Sources attributed the downward move to softening supply/demand fundamentals in the Black Sea region and the broader West of Suez Suezmax market. A UK-based Suezmax broker noted the lack of volume from the Black Sea and the overall downward trend in surrounding markets. Another broker highlighted the oversaturated tonnage list for early August loading, with six Sea of Marmara openers.
Despite the drop in freight rates, the CPC Blend crude differential reached a four-year high, assessed at a 22 cents/b discount to Dated Brent on July 17, the narrowest discount since June 2020. Traders attributed this to a shorter August loading program and a lack of cheap alternative sweet grades.
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Source: SP Global
