West African Suezmax freight rates have begun to show signs of recovery after a prolonged period of weakness, with fixing levels increasing for September, shipping sources said this week.
The WAF-UK Continent route, basis 130,000 mt, was assessed Worldscale 10 higher at w45 Wednesday, having spent the previous 10 days mired at w35.
On the fixture front Eni placed the Pserimos on subjects at w42.5 for a Bonga-Brofjorden voyage on September 13-14 while a US refiner was later heard to have taken the Pentathlon at w45 for a WAF-USAC run off the same loading dates.
The rising rates were attributed to a reduction in WAF VLCC fixtures along with an increase in Suezmax fixing across multiple regions. “We’ve seen potential VLCC cargoes split in WAF with cargoes going on the traditional WAF-East VLCC route on Suezmaxes. There has also been a really large amount of fuel oil inquiry for US Gulf Coast to the East which has taken some potential WAF ships away,” said a shipbroker.
The rising Suezmax inquiries served to boost shipowner sentiment although the WAF position list had not yet become particularly tight. “The owners are creating momentum but it’s not as if there is no tonnage around. There are still plenty of ships there,” said the shipbroker.
According to another broker’s position list there were around 21 ships available prior to the fixing window, versus 27 at the beginning of the week.
The WAF Suezmax sector has been hit hard in recent months by a number of Nigerian crude outages, with lower demand for this type of ship in what is traditionally its biggest loading area.
While freight rates have increased this week, time charter equivalent returns of around $7,000 are still a far cry from the earnings enjoyed by owners for much of the past two years. “It’s still rubbish. A little bit better but still rubbish,” said a shipbroker.
Source: PlattsPrevious Next