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What is USGC-Brazil 38kt MR Clean Tanker Assessment?
What is USGC-Brazil 38kt MR Clean Tanker Assessment?
The 38,000 mt US Gulf Coast-Brazil freight assessment captures the cost of chartering a spot Medium Range tanker to lift 38,000 metric tons of petroleum products, typically diesel, gasoline or naphtha, on the US Gulf Coast for discharge along the Southern half of Brazil's coast.
Freight for the route is assessed on a Worldscale basis and also in US dollars per metric ton. In markets where freight is traded on a Worldscale basis, Platts publishes freight assessments that reflect a percentage of the prevailing Worldscale annual flat rate basket the assessment is based on.
From: To: Houston
Santos
Houston
Salvador
Houston
Paranagua
New Orleans
Santos
New Orleans
Salvador
New Orleans
Paranagua
The Worldscale flat rates are published each year by the Worldscale Association. From time to time, the Worldscale Association publishes revisions to these flat rates in its circulars. Platts reviews these changes with the industry for possible inclusion into Platts freight calculations. Platts will update the market of any such changes through published subscriber notes. Platts determines the equivalent $/mt freight rate based on a basket of Worldscale flat rates comprising several key routes between the two regions specified in the assessment.
More information:
New waves in freight, part I: USGC-Brazil route emerges as barometer for tanker market >
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How do we assess the USGC-Brazil 38kt MR Clean Tanker Assessment?
How do we assess the USGC-Brazil 38kt MR Clean Tanker Assessment?
Unlike some of our competitors, in our assessments of tanker freight, we survey all market participants: ship owners, charterers, and shipbrokers. Our daily assessments settle at a singular number based on trades or market heards, feedback from market participants on where they see tradeable levels, rather than averages of multiple indications. In an assessment period we take into account bids, offers, indications of tradeable levels, and spot trades on the route and related routes to determine the assessment rate for a given route. Our Platts Market on Close assessment process is aligned with the NYMEX close at 13:30 Central and captures trades and activity during the day of the assessment, making for a more recent and up-to-date assessment than some of our European-based competitors.
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Platts Americas Clean Tanker Daily Commentary
Platts Americas Clean Tanker Daily Commentary
- Shipping demand remains weak, leading to increased tonnage availability
- 38,000 mt USGC-Caribbean rates increase $25,000 on day
Sentiment held steady for the Americas Medium Range clean tanker rates on Feb. 13, except for an increase of up to $25,000 for short-haul runs following an attempt by shipowners to raise these rates, which were nearing negative profit margins.
However, expectations did not foresee a rise in rates in the coming days, as shipping demand has failed to increase, allowing tonnage availability in the US Gulf Coast to continue growing.
The increase in lump sum short-haul runs was seen after BB Energy placed the Eco Joshua Park for a Feb. 20 loading USGC-Caribbean voyage with two discharge options: Pozos Colorados at $425,000 and Trinidad at $500,000.
Following this deal, market quotes for the Caribbean run were mixed; some market participants believed the $425,000 level would not be repeatable due to the ample availability of tankers and weak demand, while others said that shipowners raised this rate to distance themselves from the minimal profits associated with lower figures.
"Rates are not going up; the $425,000 was more of a correction," a shipbroker said. "Rates were so low that owners barely broke even. They got an extra $25,000 and sort of established a new floor without having the fundamentals to support a rate increase."
Platts assessed freight rates for the USGC-Caribbean run at $425,000, up $25,000 on the day, and rates for the USGC-East Coast Mexico route at $225,000, a $15,000 increase from Feb. 12.
Meanwhile, rates for long-haul runs remained stable, as active market indications for the USGC-Transatlantic route continue to deem the w95 level indicative of the market despite the lack of recent testing.
The same trend was observed in lump sum long-haul runs, as sources continued to indicate that the last-done $1.85 million level for the USGC-Chile route remained market reflective.
Market participants suggested that rates could stay low in the coming days due to ongoing refinery maintenance in the US Gulf Coast, which is expected to hinder any immediate recovery in shipping demand.
"There are not enough exports, so the ships are piling up, but there's no more room for rates to keep declining," a second shipbroker said. "I believe that by the end of March, rates should increase, or perhaps they will improve by the end of next week."
Platts is part of S&P Global Energy.
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Platts Clean Tanker Heards