In International Shipping News 21/10/2016
Americas clean freight rates spiked up to 40% on local short-haul voyages to the Caribbean and the East Coast of Mexico and 21% on the US Gulf Coast-to-Chile trip, as prompt tonnage avails contracted after shipowners ballasted vessels to both Europe and Asia in search for better earnings.
Freight on the USGC-Caribbean run increased from $240,000 lump sum Monday to $335,000 lump sum Thursday, up 39.6%, when CCI was heard to have placed the Armor on subjects at that level loading during the last five days of October.
The rise in freight prompted Time Charter Earnings on that run to improve to roughly $6,000-$7,000/day from around $200-$400/d. Together with demurrage at $16,000/d, a rather attractive return, a charterer surmised.
The long-haul USGC-Chile trip rose close to 21% from $825,000 ($21.70/mt) to $995,000 ($26.20/mt) lump sum, with Chevron placing the Silver Entalina on subjects at that level.
S&P Global Platts data showed that freight from the USGC to trans-Atlantic destinations registered 28.6% gains from Worldscale 52.5 on Monday to w67.5 Thursday, as evidenced when ATMI took the Minerva Mediterranean at that level loading October 29-31, with an option to discharge in Chile at $995,000 lump sum.
Shipowners started speculating that a 20% decrease in allocations for Colonial Pipeline cycles 60 and 61 could be the cause for the bearish clean freight market to turn around, as a repeat of what happened during Colonial’s Line 1 disruption in the second decade of September.
Yet shipping analysts clearly attributed the tight tonnage for third-decade October dates to a significant amount of vessels having ballasted from the US Atlantic Coast and the East Coast of Canada to Europe.
“If I run my AIS search for units that visited the USAC and are now bound for Europe, I get 43 units, including ex-ECC,” a shipping analyst said.
Vessels ballasting from the West Coast of the Americas to Northeast Asia was limited to the count of one, namely the FPMC 25 headed from Taboga Island, Panama, to Chiba, Japan, according to cFlow the S&P Global Platts trade-flow software. But shipowners confided that the incentive to ballast to Asian waters had dwindled recently as eastern markets had reacted to the weight of increased tonnage from the western waters.
“I think in part it [recent gains] owes to the stronger demand earlier this week on the pricing blip […] due to Colonial, and maybe there is more of a forward anticipation in the market now leading to some advantageous voyages,” a shipping analyst said.
In particular, a buy tender for 300,000 barrels of ULSD into Pozos for delivery November 9-10 together with three charterers fixing vessels to Chile appeared to lift the market momentarily.
In addition, brokers believed a stronger inquiry level coupled with charterers needing all options had helped to turn the market around. “A lot of it is tender business, but what happens is that you have three people going for the business and placing three vessels on subs and then failing two,” a charterer commented.
Source: Platts
