March fixtures hit 17-month high on back of soaring spot market.
Average rates overtook VLCC prices as cargoes flooded into the market.
AFRAMAX spot fixture volumes reached a 17-month high in March when a total 262 bookings were concluded on the spot market between owners and charterers.
The last time volumes were this high in the aframax sector was in October 2008, according to data from London broker Clarksons.
High volumes coincided with an 18-month high of average aframax time charter rates, as spot markets in the Mediterranean and North Sea markets rocketed due to a combination of greater demand and a lack of available vessels.
By comparison, in February just 187 aframaxes were fixed on the spot market, marking a three-year low, and the average time charter rate fell from $17,000 per day at the start of the month, to $7,000 at the end.
While the first week of March started slow, by last week average aframax rates had climbed nearly six-fold to $41,000 per day, overtaking average very large crude carrier rates in the process.
An initial boom seen in the cross-Mediterranean aframax market saw the TD11 route, shipping 80,000t cargoes from Banias to Lavera, jump from $5,692 per day, or W95, at the start of March to a high of $45,767 per day, or W202, levels last seen in August 2008.
Brokers working in this market could not explain the reason behind the influx of cargoes, but said owners with aframax available in the area were more than happy.
Clarksons" data showed Ceyhan terminal alone accounted for at least 23 aframaxes booked to load crude from the Turkish port.
The rocketing Mediterranean market then helped sentiment in the North Sea and Baltic Sea markets, which combined with a rise in cargo inquiry and lack of ice-class ships saw time charter equivalent earnings for vessels loading in the frozen Russian port of Primorsk soar to $82,500 per day, with a corresponding Worldscale rate of W215. The last time owners" returns had been this high on the TD17 route was 20 months earlier in June 2008.
Of the fixtures reported by Clarksons, at least 27 were specific to Primorsk.
Shell came top in the charterers" list for March, booking at least 25 aframaxes on the spot market. The Dutch oil giant was closely followed by Clearlake Shipping, the chartering arm of Swiss commodities trading group Gunvor International, which fixed at least 22 aframaxes globally.
Unfortunately the rally in the aframax market has come to an end and rates and earnings have now been on the slide for the last week.
?It"s amazing how everything has dropped off so quickly,? said one London broker. ?The rates have really plummeted since last week, but hopefully now we"ll just see it come off at a slower pace.?
Portuguese oil company Petrogal was the latest charterer to push both the Mediterranean and North Sea markets down.
It was reported to have booked the 2006-built, 109,647 dwt Maersk Producer at W125 to load on April 5 at Libya for a trip back to Portugal. This, and another unreported fixture yesterday afternoon, helped drag the cross-Mediterranean route down to W100, or $9,240 per day.
Petroga l also fixed Chevron"s 2003-built, 99,999 dwt Neptune Voyager to load a 80,000 tonnes crude cargo from Flotta, Scotland, on April 9 for a trip back to Sines at W110, which works out to time charter equivalent earnings of around $15,000-$20,000 per day.
?It speaks volumes about how little cargo there is out there at the moment,? said the London broker, adding that at least nine aframax owners were thought to have made offers on the Flotta cargo.
Falling sentiment in the North Sea has hit the Primorsk spot market too, with prices softening to W190 and brokers predicting the next done deal will be even lower at W180.
Total"s chartering CSSA brought rates down when it was reported to have fixed the 2006-built, 114,896 dwt Stena Atlantic to load a 100,000 tonne cargo out of the Baltic and back to the UK Continent on April 12. This brought down the Baltic Exchange TD17 route to W183 or $64,531 per day.