Dirty freight rates for the Suezmax market in the West of Suez region shot up to a 15-week high Oct. 12, with market sources pointing to an expected seasonal rise in inquiry levels, a rapidly strengthening US Gulf market, firming VLCC and Aframax markets and insufficient tonnage to meet demand.
Not registered?
Receive daily email alerts, subscriber notes & personalize your experience.
Register NowPlatts, part of S&P Global Commodity Insights, assessed wet freight on the 130,000 mt West Africa to UK-Continent route at Worldscale 107.5 on Oct. 12, up w30 day on day to its highest since June 28.
Wet freight for the Suezmax WAF-East route had been hovering at historically low levels between w65 and w75 since the first decade of August but signs the market could be about to firm first appeared midday Oct. 11 when four new 130,000 mt cargoes became available in the West Africa region at the same time.
Then, the market finally sprang into action on the morning of Oct. 12, when it was reported that Repsol had placed the Raptor on subjects for a 130,000 mt cargo loading in Nigeria and discharging in Spain off an Oct. 30 laycan, at w105.
The market continued to firm throughout the day, with news emerging in the evening that Total had placed the Beijing Spirit on subjects for a 130,000 mt cargo loading in WAF and discharging in UKC or the Mediterranean off an Oct. 4-6 laycan, at w115.
"Things are firming everywhere for owners after the US market jumped up, and now everything else is following," a Europe-based Suezmax broker said.
The market had been on the cusp of pushing up for the past week or so, but it was only on the morning of Oct. 12 that "people finally pulled the trigger", the broker said.
"The market has gone nuts. US Aframaxes went up again last night, so the rate for the next-done Suezmax fixture in WAF will increase ever further," a UK-based Suezmax broker said.
The Europe-based Suezmax broker also said he expected rates to continue rising but noted that any time Suezmax rates rose this summer, they tended to fall back to previous levels shortly after.
"It is a case of seeing if we can stay at these levels. Much will depend on whether the VLCC market can absorb all these cargoes."
Booming USG market
The Americas freight market continued to rally across all major ship classes Oct. 12 as owners were able to achieve higher than last done levels on a steady stream of inquiry and patchy tonnage list, confirming expectations of a seasonally high start to the fourth quarter.
Platts assessed freight for the benchmark 70,000 mt USGC-UKC route at w215, up w40 day on day to its highest level since May 23.
The VLCC segment also jumped after a flurry of fresh inquiry in late trading Oct. 11, with rates seeing gains as large as 17% day on day for eastbound voyages and 33% for trans-Atlantic runs.
Platts assessed freight for the benchmark 270,000 mt USGC-China run at a lump sum $9.5 million, up $1.4 million to its highest since June 22.