The 270,000 mt VLCC USGC-China contract traded for first-quarter 2020 for the first time ever Friday on the Intercontinental Exchange on what shipbrokers said is a combined hedge against IMO 2020 bunker cost rise and elevated US crude export volumes.

The S&P Global Platts-connected ICE contract for Q1 2020 traded at $30.3740/mt for 260 lots of 1,000 mt each, or at a lump sum $8.2 million equivalent. This was 39% higher from the active Q3 2019 traded level, which was last done Thursday at $21.8519/mt, or lump sum $5.9 million.

No trades have been seen for Q4 2019 paper, though they were last heard sitting at a bid-offer range of $7.85 million-$8.75 million Friday morning.

Shipping sources have pointed to a myriad of factors lending bullish support to rates, including uncertainty with upcoming IMO 2020 sulfur regulations as well as an expected uptick in US crude export demand.

Spot levels are currently trading much lower, last assessed Friday at lump sum $5.4 million, reflecting a fixing window of April 13-May 13. Rates have tumbled over the course of March, falling $1.6 million, or 23%, from the start of the month as charterers have held off on fixing cargoes amid inactive export cargo itineraries.

“The back half of the year and on, people expect more exports from the US with pipelines coming online allowing for less bottlenecks and on top of that, a seasonal high too,” one shipbroker said.

Seasonal trends also dictate that rates will move higher into the latter half of the year and into the next year as charterers work to fix cargoes ahead of the year’s end.

Q4 2018 saw historically high rates for VLCCs on the USGC-China route, reaching a record high of lump sum $9.4 million on December 4, 2018, averaging $8.11 million in Q4 2018. Freight for the route has averaged $5.8 million since the first day of assessment on March 1, 2018.

Freight rates for the route fell in Q1 2019, however, they remained at historical highs not seen since late September 2018.