20-09-2017

Tankers: Mediterranean clean freight rates up sharply as demand spikes

Freight rates for clean Handysize tankers in the Mediterranean and Black Sea have risen sharply in recent days to levels not seen since late April after demand picked up suddenly while the supply of prompt ships was limited, shipping sources said Tuesday.

The oil products vessel Bentley I was said to be on subjects to Trafigura Tuesday for shipping 30,000 mt from Bourgas, Bulgaria, to Israel at Worldscale 235 for a September 26 laycan. Discharging in Israel normally calls for a premium which, in the current market, was hard to the assess, brokers said.

Meanwhile, the Valle di Aragona was said to be on subjects for a 30,000 mt cargo for cross-Med shipment at w200 with an Italy discharge option of w210, laycan September 24.

"The explanation for this is that there are a lot of cargoes. It has been quiet for so long and now they are no longer held back," one shipowner said.

"There are also fewer ships around, and delays have helped."

The Black Sea-Med route, basis 30,000 mt, was assessed at w200 Monday, w40 higher than on Friday and up 40% over the past five days to the highest rate since the last week of April. The cross-Med route, basis 30,000 mt, was assessed at w190, up w35 from Friday.

One broker said vessels were carrying cargoes west to supply the US market after US Gulf refineries were shut down because of Hurricane Harvey, which had thinned out the tonnage list in the Mediterranean.

"Less tonnage is available, but it will not continue for long I think," the broker said. "Some vessels are ballasting to come back into the Med or to the UK Continent due to the fact that they cannot find suitable employment elsewhere, plus some bad weather helped owners to finally reach the w190-w200 levels."

One owner said that while the number of cargoes in the Mediterranean and the Black Sea had increased, the previous situation with large numbers of prompt ships for charterers to choose from at any given time was now reversed.

"While before we were used to there being something like 6-7 prompt ships available, now there is practically nothing," said one shipowner.

Amid a pick-up in heating fuel demand ahead of the winter season, gasoil values have bounced. Algeria's Sonatrach has followed up its tender for prompt cargoes delivered in September with another for October delivery dates.

The latest tender, which closed Monday, was for six cargoes of 0.1% gasoil totaling 210,000 mt into Arzew and Skikda.

While Sonatrach typically tenders for a total of three cargoes per month, it is not known to issue requests for delivery on such a prompt basis.

Source: Platts 

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