An increase of Aframaxes on the Pacific side of the Americas positioning towards Asia-Pacific lowered eastbound rates out of Vancouver, as well as rates for short-haul voyages to the US west coast.
The rate to ship 80,000t of crude, or about 550,000 bl of Cold Lake, from Vancouver to China fell to $3mn lumpsum on Wednesday, down by $400,000 from the start of December. That rate, the lowest in more than a month, was equivalent to $5.54/bl for Cold Lake. Suncor put the Esteem Cowboy on subjects for that rate and route loading from 19-20 December. The deal followed a pair of Aframaxes put on subjects earlier in the week for the same route at $3.25mn.
There were approximately 34 Aframaxes available to load out of Vancouver over the next 20-24 days, according to analytics platform Vortexa. That was up from 22 Aframaxes available from the same point in November.
Even with rates falling, demand has kept levels buoyed above where they averaged during the summer months. Canadian heavy waterborne crudes are more competitively priced into China so far in December than grades from the Mideast Gulf. The Vancouver-China Aframax rate dipped below $2mn in June, held above that level for most of July, and hovered just below that level through most of August.
The rate for a USWC-bound voyage was also lower this week compared with last week, though levels remain higher from the dip seen in the middle of November. The Vancouver-USWC Aframax rate has hovered at Worldscale (WS) 250 since 1 December, equivalent to $3.13/bl for Cold Lake, after holding at WS255 since 19 November. The rate for that route dipped to WS230 in the middle of November but rose through the rest of that month, pushed up as the number of available Aframaxes were siphoned away by Asia-Pacific-bound voyages. Direct transpacific shipments remove vessels from the west coast North America market for about 45 days.
Charterers' preferences shifted in 2024 to ship crude directly from Vancouver to destinations in Asia-Pacific, as opposed to traveling down the US west coast to discharge onto a very large crude carrier (VLCC) in the Pacific Area Lightering (PAL) zone. But even with US-China port fees on pause for virtually a year, that will likely remain the preference. The direct route saves time and, with VLCC rate still firm, remains cost-effective.
