Limited demand for oil products in Switzerland and Germany, combined with full land storage facilities have resulted in “empty” barges in Europe, with freight rates on Cross-Rotterdam trips dropping to record lows, according to S&P Global Platts data.
Freight rates on the cross-Rotterdam trip, for cargo sizes between 3,000 mt and 5,000 mt, bottomed out to lowest levels assessed by S&P Global Platts at $0.90 mt on July 28, and they have remained steady at those levels for over 15 days since then.
Physical inland demand for ultra-low sulfur diesel barges has been constrained for much of July and the beginning of August, with major end-user markets covered by local refinery production and bloated regional stocks.
This has resulted in a subdued pull for product from Amsterdam-Rotterdam-Antwerp, stymieing marginal barge movements.
In the ARA storage hub, distillates inventories (excluding jet/kerosene) were at 24.41 million barrels in the week ending August 5, which is 1.1% higher than the previous week and almost 30% above the five-year average, according to PJK International data.
“Everybody is full in Germany, there was some interest with the flat price dropping last week but now with the flat price up no one is there to buy,” a diesel trader previously said.
“For as far as we can see still high water levels are limiting the barges needed for Rhine destinations. Storage full so limited demand for German and Switzerland destination. There was some demand for heating oil due to low prices, but limited — as storage are full. Low demand from Belgium, not much export of gasoline, or components to US, West Africa. So, hardly any waiting queues in Amsterdam,” a barge operator said.
Meanwhile, jet barges were being considered by some traders in the market who were starting to struggle with space in tank. As a result, those with minimal ullage were buying barges instead of cargoes.
“Where you have a bit of ullage, you buy and store and if you only have like 3kt of space then you’ll buy a barge,” one source said.
Aside from this buying interest, the Northwest European jet barge market was relatively quiet, with buyers holding their bids stubbornly below offer levels.