NWE dirty Aframax freight rates reach 6-month high on tight tonnage

2014-07-18

High inquiry levels and a severely shortened position list resulted in dirty freight rates on the Cross-UK Continent route — basis 80,000 mt — rising to a six-month high Wednesday, shipping market sources said Thursday.

Rates on the route increased Worldscale 60 to be assessed by Platts at w170 Wednesday. This equates to $12.73/mt, the highest level since January 31′s $13.11/mt assessment.

Sentiment in the Baltic Sea was also extremely firm, sources said, with rates on the Baltic-UKC route — basis 100,000 mt — increasing w35 to w130 on the back of a tight tonnage list. This is also the highest level since January 31.

As the same group of ships typically competes for North Sea and Baltic cargoes, any movement in rates in one region is usually swiftly followed in the other.

“There are potentially six or seven cargoes to be covered in the Baltic and the North Sea and there are very few ships available for the end of July,” said one shipbroker.

“The fundamentals don’t really support the massive jump in rates, a lot of it is sentiment,” said a charterer. “I actually see the rates holding in the short term, though, because of the strength in other regions. The Mediterranean rates have jumped and owners know they can earn good money down there. This means they can be a bit stronger with their rate ideas in the North.”

Aframax rates on the Cross-Mediterranean and Black Sea-Mediterranean routes were assessed by Platts w25 higher at w130 Wednesday after a number of Libyan stems hit the market at higher levels.

The charterer added that the current high freight rates being commanded by Suezmaxes have been boosting sentiment for Aframax owners.

“With Suezmax rates being so firm it takes the option of loading Aframax stems on Suezmaxes away from the charterers. This means the cap on Aframax rates has been removed,” said the charterer.

Source from : Platts

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