Caribbean Aframax freight rates fell to a level not seen since February 2011 as owners leaped at the chance to get ships fixed Tuesday.
The Caribbean-US Gulf Coast route basis 70,000 mt was assessed at w82.5, or $6.96/mt. The last time that route finished at a $/mt level that low was February 16, 2011, when it also ended the day at $6.96/mt.
The Aframax market has been weak for some time as cargoes were scant and tonnage grew steadily in the region. That all came to a head on Tuesday.
“There were ships waiting and cargoes finally started coming, so owners got all excited,” a shipbroker said.
A pair of deals were done that showed the downward trend of the market. First, an unnamed charterer took the British Robin at w85 for a Puerto La Cruz-USGC journey basis 70,000 mt with a July 5 loading. That was closely followed by ST Shipping taking the Ridgebury Sally B at w82.5 for a Mamonal-USGC trip of the same basis with a July 6 lifting.
Another shipbroker was not surprised at the downward turn.
“There are so many prompt ships down there it had to happen sooner or later,” he said.
There are 21 ships opening in the region through July 17, 14 of which are available for prompt dates.
Another market participant said the slide should be short-lived, with the US Fourth of July holiday coming up.
“Hopefully we will see a lot of this Aframax tonnage taken out,” he said. “A lot of cargoes should be coming out Tuesday and Wednesday because of the long weekend coming. Everybody will want to have things fixed by Thursday.”
If there is a silver lining for shipowners to this five-plus-year low it is that bunker prices are in their favor. On Tuesday, IFO 380 Balboa ex-wharf was assessed at $244.00/mt. On February 16, 2011, it came in at $596.50/mt.