Suezmax freight rates in the Caribbean went into a freefall Tuesday dropping more than 20% to levels not seen since 2010.
Sources said the plunge was triggered by a long position and a lack of cargoes.
The Caribbean-US Gulf Coast route was assessed at Worldscale 57.75, or $5.26/mt. The last time that route had been assessed lower was September 15, 2010, when the rate finished the day at $5.24/mt.
Meanwhile, the Caribbean-UK Continent run ended Tuesday at Worldscale 35.5, or $4.87/mt. On September 2, 2010, that voyage was assessed at $4.85/mt.
S&P Global Platts has been assessing those routes since May 15, 2002.
A trio of fixtures supported Tuesday's rates. Citgo booked the Al Agaila at w50 for a Jose-USGC run basis 150,000 mt with an August 4 loading, while Repsol took a pair of ships at w31.5 for East Coast Mexico-Spain voyages with a 147,000 mt basis.
The Sabine will lift August 3, while the Ridgebury Capt. Drogin loads August 11.
The swift decline in freight rates caught some market participants by surprise.
"We heard that a cargo was getting multiple offers, so we knew it would drop, but we didn't think it would be as deep a drop as we got," a shipbroker said.
There were seven offers for the Citgo cargo, the shipbroker said.
Tonnage in the region remains robust with 11 tankers opening in the region through the end of July, while four more become available in the first two weeks of August.
At the same time, inquiry is slack.
"Overall sentiment is soft for Suezmaxes. There are just not enough cargoes out there. I haven't seen a single fresh one for the Atlantic Basin [Tuesday]," the shipbroker said.
Source: S&P Global PlattsPrevious Next