Lack of diesel barge trade in ARA depresses freight rates

Quantum Commodity Intelligence - Freight rates for oil product barges in ARA have dropped Monday because of the dearth of activity in middle distillates, according to brokers Riverlake.

Rates between Rotterdam and Antwerp or Amsterdam were pegged at €1.65/mt, down from €1.75/mt on Friday.

Rates between Antwerp and Amsterdam have fallen to €2.20/mt, down €0.10 from Friday, and between Flushing and Rotterdam, rates have dropped to €2.20/nt, also down from €0.10/mt.

"Reduced trading volumes of middle-distillates in the ARA hub are causing owners to be covered only on the spot," noted Riverlake.

"ARA freight suffered from a severe drop."

Friday saw another dearth of diesel barge trade with no deals reported in the 1600 to 1630 BST electronic window, repeating several blank days this month, according to broker data.

The expiry of the June Low Sulfur Gasoil contract on June 10 has added to the lack of activity, with only 250 lots of open interest left, or 25,000 metric tons of ULSD for delivery over the second half of the month in ARA.

It was the smallest volume left for expiry since records began in February 2015.

The Rhine is expected to swell over the next few days after heavy rainfall, which will mean a standard 110 metre long barge carrying 2,500 mt of product can motor up the waterway to Birsfelden in Switzerland, rather than carry a lighter load.

"If this intake lasts over the coming days, freights (for voyages up the Rhine) will tend to decrease," Riverlake noted.

The Rotterdam to Birsfelden rate was unchanged Monday at 12 Swiss France, according to the brokers.  

Trade in gasoline barges has been average, with around 100,000 mt changing hands last week, Riverlake added.