Refinery outages caused by Hurricane Harvey have led to a jump in gasoline shipments from Asia to the US and Latin America, according to a report from Ocean Freight Exchange (OFE).
The hurricane, which wreaked havoc on global oil markets as almost a quarter of US refining capacity was shut, has impacted Asia's refined products as well as product tanker markets.
Charterers have been playing it safe by adding multiple discharge options including the USWC, USGC, WC Mexico and Peru. Around 865 kt of CPP from Asia has been tentatively booked to move to the US and Latin America since August 25. In comparison, around 375 kt was fixed for August loading before Harvey while July volumes were 675 kt. While cargoes from Asia to the US typically move on MRs, some LR1s have been chartered as well.
As such, MR rates in North Asia have been creeping up with rates for a South Korea/USWC voyage basis 40 kt up by USD 150,000 w-o-w to USD 1.15 million. Rates for a South Korea/Singapore run basis 40 kt grew by USD 20,000 from last week to USD 350,000. Overall sentiment in the North remains firm as a number of outstanding enquiries remain for transpacific cargoes, OFE said.
"It is worth noting that quite a number of ships have failed subjects and are currently continuing to do so. Some ships were released as traders rushed to fix before they had the cargoes, while some traders were unable to find a buyer as key USGC refineries resumed operations, alleviating concerns about supply shortfalls," OFE added.
USGC shipment delays has left LatAm buyers with no choice but to turn to Asia for gasoline imports. PMI, one of the largest buyers of USGC gasoline, has provisionally fixed at least two MRs to carry gasoline from South Korea and Singapore to West Coast Mexico.