WAF-UKC Suezmax market falls to nine-month low amid seasonal decrease in demand

The freight rate for Suezmax voyages loading in West Africa and discharging in the UK-Continent fell to a nine-month low in dollar per metric ton terms on July 3, amid recent softness in the US Gulf market, a lengthy Atlantic tonnage list and muted inquiry levels.

Platts, part of S&P Global Commodity Insights, assessed freight on the 130,000 mt WAF-UKC run at w100, inclusive of EU ETS charges, Jul. 3. The EU ETS exclusive rate for the route was assessed at a six-month low of w97 -- the lowest level since Dec. 19.

However, when assessed in $/mt terms, the picture appears even more bearish. Platts assessed the WAF-UKC Suezmax route at a nine-month low of $16.07/mt on July 3, the lowest price since Oct. 11.

Despite this recent decline in rates, market participants are not currently expecting a sustained collapse, although they did note that some further softening is possible.

"The market is set to go down, in line with where the US Gulf has gone, and tonnage for WAF is still adequate for current dates," a London-based Suezmax broker said. "Moving forward, I think we'll reach a bottom this week, rates will probably be steady next week, and then we'll be waiting for the next USG cycle to drive things back up."

The WAF crude tanker markets remains untested at current levels, with the latest reported WAF-UKC Suezmax fixture settled at w112.5 on July 1.