Interest in Aframax time charters in Singapore has been rising on the likelihood of fuel oil ullage issues in February and March, market sources said Thursday.

Taking an Aframax on time charter is cheaper than paying the demurrage on Suezmaxes arriving in Singapore now, shipping sources said.

“A number of Suezmax tankers are coming in with demurrage at $40,000/day, while an Aframax on short time-charter is at $15,000/day,” said a charterer.

The market expected around 5.3 million-6.1 million mt of fuel oil to reach Asia in February and some of this volume might roll over into March with demand see to be low for February and March, amid the post-Lunar New Year lull and a shorter month, said trade sources.

March arrivals are pegged around almost 5 million mt, so supply is looking ample at this point, especially if demand did not pick up, they added.

Typically, around 4 million-5 million mt of fuel oil to move from the West to East so the recent inflows were a touch above average, they added.

An Aframax tanker typically loads 80,000 mt of fuel oil, while a Suezmax tanker loads 130,000 mt.

Market sources said Vitol, ST Shipping and PetroChina had already chartered dirty product tankers to minimize their costs.

Glencore’s shipping arm, ST Shipping, had placed both Aframax tankers Ross Sea and Serene Sea on 30+30+30 days time charter, at rates of $14,000 per day, $15,000 per day and $16,000 per day for the respective 30 day periods, said sources close to the matter.

The charterer was seeking more vessels, sources said, adding that ST Shipping may have extended its time charter for Aframax tanker Sulu Sea as well.

Vitol had fixed two Suezmax tankers — the Kimolos Warrior and Chafa — for 40-60 day time charter each at $15,500/day last week, sources said.

ST Shipping, Statoil, Itochu and Vitol were still seeking Aframax tankers for short-term time charters to store their cargoes in Singapore, shipping sources said.

Socar had fixed two VLCC tankers, Huge and Snow, to ship fuel oil from Rotterdam to Singapore, loading mid-February, they added.

Vitol, PetroChina, Itochu, Statoil could not be immediately reached for comment or refused to comment.

Source: Platts