Singapore — Aframax rates surged to a multi-month high on tight Indonesian and Persian Gulf vessel supply, and increased cargo demand as well as tonnage tightness caused by weather-related issues in the regional market.
The cost of moving crude along the Persian Gulf to East route on Aframaxes hit a 20-month high Monday, while the cost along the Indonesia to North Asia route similarly climbed to the highest level since last September, S&P Global Platts data showed. The tight tonnage supply and increased fixtures has contributed to the surge in Aframax rates, a market source said.
The recent typhoon plagued vessel itineraries in the Far East, making it hard for vessels to reposition in time to pick up fresh cargo along the Indonesia and Persian Gulf route, an Aframax owner said, adding that the accumulated delays had put pressure on vessel supply.
The route from the Persian Gulf to the East, basis 80,000 mt was assessed at Worldscale 123 or $18.06/mt Monday, the highest since December 2016 when it was assessed at $18.39/mt.
The key Indonesia to Japan route was assessed at Worldscale 117.5 or $12.22/mt on Monday, the highest since September 2017 when it was assessed at $12.31/mt.
The tonnage list available until end-August is tight, whereas the early-September loading window looked to have eased a bit, a broker said.
The bad weather has prompted several replacement fixtures since last week in North China, causing an average of two more days of being caught up in Far East ports, another broker said.
The typhoon made landfall in Shanghai on August 16, leading to port closures from South China to North China, as well as the Onsan port in South Korea.
Japan is now bracing for the incoming Typhoon Soulik, which is going to further impact vessel itineraries this week, a broker said.
"The fixing activities have picked up a lot and came at the same time for the end-August loading window", a broker source said. As result, "with tight supply, charterers are left with less choices of vessel," he said.
The modern ships are grabbed from the opening list, while the rest of the owners will continue to put up strong resistance to drop the rates, a broker said.
The Kythira Warrior was placed on subjects by GSC basis September 2 loading for the Ruwais to Yosu at the rate of w121, market sources said. Due to cheaper freight, the Nordic Passat, which is a Suezmax vessel, was replacing an Aframax tanker, Kanpur, to partially load 80,000 mt of fuel oil from Khawr Al Zubair to Singapore at a rate of Worldscale 80, according to multiple sources.
