The East-West arbitrage to take high sulfur fuel oil on VLCCs and Suezmaxes from the Amsterdam-Rotterdam-Antwerp region to Singapore will see fewer fixtures due to stronger freight, according to traders.
Freight for a 270,000 mt VLCC to carry fuel oil to Singapore reached a two-week high Monday after strong crude demand saw VLCC fixtures soar, traders said.
"I don't think we will see anymore fixtures for now," said a trader. "VLCCs are too expensive right now so the East-West has to rally for it to open up."
Five VLCCs and two Suezmaxes are scheduled to make the journey from Rotterdam to Singapore in April. "Though the vessel count for April is good, there will definitely less going forward," the trader said.
Only one of those seven vessels has loaded thus far, so there is a real possibility of cancellations, according to sources.
The next vessel to load from Rotterdam is the Maran Triton, set to load April 21.
The vessel is currently en route to Europe, sailing off the coast of West Africa, according to S&P Global Platts vessel tracking software cFlow.
Additionally, the arbitrage on a Suezmax vessel also remains difficult to work, with a higher risk of losses, according to traders.
"On a Suezmax it is even worse," a second trader said. "You will make losses of around $4/mt."
"Even if [freight] comes off, it would need to reach the $1.6 million lump-sum mark to just make some sense," he said.
