Weather delays, positional tightness firm up Asian Aframax market

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A dearth of tonnage for Aframax tankers, caused by weather inflicted delays in North Asian ports, in addition to busy activity this week spiked the key Indonesia-Japan voyage rate up 12.5 Worldscale points Wednesday, said market sources.

“I think the market is firming dramatically with w122.5 for Lion City River a fair [indication] of the market,” said a shipowner. “The position list across the board is looking pretty tight. Not many fresh cargoes came out on Wednesday after that fixture as charterers are holding back after that spike.”

CNOOC placed the Lion City River on subjects for a voyage from Seria in Brunei to Dalian in China, loading over December 8-10, at w122.5 basis 80,000 mt, confirmed a source aware of the matter. Platts on Wednesday had assessed the Aframax Indonesia-Japan rate on the deal at w122.5 basis 80,000 mt.

This higher fixture rate coupled with a high rate heard on ExxonMobil’s replacement job to boost Aframax owner sentiment.

ExxonMobil placed the Nectar Sea on subjects for an Indonesia-Australia voyage, loading December 2, at w145.

This was to replace the New Activity, which had been placed on subjects last Thursday at w112.5.

“There has generally been an increase in activity for the Aframax tankers and there is not enough ships to support that,” said a Singapore-based charterer.

“Aframaxes are facing a long waiting time in China, especially due to storage,” said another shipowner source. “This has been since end-October until now as there is an oversupply of crude, so it takes time for them to clear space on shore.”

Chinese ports Yingkou and Laizhou were closed, also delays were heard in Dalian due to ice and ports Ningbo and Rizhao due to winds.

In South Korea, Aframax tankers experienced delays due to swell and winds at Ulsan, sources said.

These delays led to a thin tonnage list for Aframax tankers out of Singapore for the first decade of December.

Sources said this tightness in Southeast Asia also decreased availability in the Persian Gulf, with fewer ballasters coming in from the Singapore region.

The Aframax Indonesia-Japan rate had stayed below w100 for more than three months — since August — until finally reaching the w100 level November 18 and climbing upwards since then.

Source: Platts

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