Americas clean tanker freight surpasses 2020 floating storage boom rates

Key US Gulf Coast loading clean tanker freight rates spiked 22% to Chile, 25% to the Caribbean, and 38% to Brazil on April 5 after a week-long fixing spree that started on March 30.

At the April 5 assessed rates of $3.3 million and w420 for the 38,000 mt USGC-Chile and USGC-Brazil runs, the cost of carrying Medium Range clean petroleum products cargoes on the interregional Americas routes surpassed levels seen during the height of the pandemic floating storage boom in April 2020, which put over 200 million barrels of crude and products into floating storage, taking up roughly 5% of the global tanker fleet.

A shortage of local diesel supply in the Caribbean and South America amid heightened power generation demand, reduced refinery utilization rates and an increased call on diesel during the harvest season in Argentina and Brazil have prompted strong charterer inquiries, which quickly depleted Medium Range tanker tonnage opening on the US Gulf Coast.

"There are no tankers remaining for prompt loading, charterers have tried staying ahead of the curve, so they're looking further out to the second fortnight of April," a shipowner said.

The tanker markets had experienced a massive backwardation previously, with refiners waiting until the last minute to take cargoes down to South America, but another scenario has left the markets struggling to balance tonnage with cargoes needed.

"Seems as if charterers tried to anticipate, but looks like everyone thought the same," the shipowner said. Cargoes for the Americas clean tanker markets typically can support prompt loadings for MR tankers two to three days out. However, a plethora of fresh stems to interregional destinations in the Americas since March 31 has led to depleted tonnage for prompt loading.

Charterers, pressed with demand, are having to balance when best to load their cargoes for voyages.

"We're used to seeing up to five days out in cargoes, now we're seeing an average of charterers looking eight days out for loading," a second shipowner said.

As many as 11 different refined oil products cargoes were left uncovered by the end of the trading day April 5 to disports in the Caribbean, Brazil, Argentina, Peru, Chile and across the Atlantic with laycans ranging across first- and second-decade April laycans.

Charterers upsize cargoes

Some charterers were upsizing their 38,000 mt cargoes to 60,000 mt Long Range 1 stems to alleviate the tonnage squeeze on the Medium Range market and boosting LR1 rates 22% on the day for the 60,000 mt USGC-Transatlantic route to w225, and 28% for the USGC-Brazil route to w245, S&P Global Commodity Insights data showed.

"From this point on the position list will become very hard to navigate," a shipbroker said. "Last done is certainly out of the cards, as owners push the pedal to the floor further firming the market."