The cost of sending fuel oil cargoes on Handysize tankers from the Black Sea to the Mediterranean has surged due to a sharp increase in cargo flow in the region, market participants have said.
The Black Sea-Med route, basis 30,000 mt, jumped w25 to w130 Thursday. This is the highest level since an identical w130 assessment July 19.
The rising freight rates were attributed to a large rise in inquiries for ships for loading dates at the end of August and beginning of September. There were around 10 cargoes heard working Thursday and sources said several more were being worked on a private basis. A large portion of the cargoes were due to load in the Black Sea.
The increase in cargo flow served to considerably tighten up the Med position list, with vessel availability particularly low for prompter dates.
On the fixture front, ORL was heard to have placed the Esther on subjects at w140 for a Black Sea-Med voyage loading September 1. Eni also reportedly failed a ship at w145 for a prompt Black Sea-Med run. According to market participants, freight rates would be slightly lower for more natural loading dates.
The freight rate rally could prove short-lived however, with fuel oil traders seeing limited supply coming for much of September. Fuel oil traders in the Med have found some relief as refineries in Sarroch, Falconara and Tarragona make available long-awaited cargoes which had left the market increasingly tight.
“I think maybe there will be some more cargoes on offer soon, otherwise the market will revert to being extremely tight again?,” said a fuel oil trader.