Delays at Mexico ports tighten supply for Gulf tankers, sharply boosting freight rates

Americas clean tanker freight rates have risen 27% to 80% since the start of February, depending on the route, due to low vessel availability on the U.S. Gulf Coast and exacerbated by port congestion in region and unloading delays on the east coast. Mexico.

While the average wait time for USGC cargo to be unloaded at the Mexican ports of Tuxpan and Pajaritos was four days on Feb. 18, it reached eight days on Feb. 14, a shipbroker said. Ships may not be able to unload due to a lack of space in shore storage, he added.

Shipowners generally allow for two to three day unloading delays for one-off trips to the east coast of Mexico. Bad weather in the region could also be a factor in congestion, a logistics source in Mexico said.

“It’s nothing new there – they always have filling delays throughout the year,” a maritime source from Latin America said. “But, yes, right now that’s the case in Mexico.”

Mexican state Pemex did not immediately respond to a request for comment on storage capacity on Mexico’s east coast.

Mexico is by far the main destination for American products, mainly from the American Gulf Coast. Data from the US Energy Information Administration shows that approximately four shipments of gasoline, diesel, jet fuel, propane and other US products are delivered to Mexico daily.

Five medium-range tankers, totaling 244,316 DWT, were shown anchored outside Pajaritos since Feb. 11-17, according to Platts cFlow trade flow analysis software Feb. 18. At Tuxpan, eight MRs totaling 397,298 DWT were shown awaiting discharge, with the first arriving and anchored on January 26 and the last on February 17. If the MRs were all loaded with full cargoes of 38,000 tons of gasoline, the combined products would total approximately 4,298,000 barrels.

Freight reinforcement

Infrastructural delays slowly reduced the tonnage available in the USGC loading region in February, while shipments exported from the USGC increased in number. Shipowners took advantage of the tight supply, increasing spot freight rates on most USGC loaded MR routes.

Freight on the USGC-East Coast Mexico short-haul route is up 80% since early February, last valued at $450,000 on Feb. 17 from $250,000 on Feb. 1. On longer trips to Brazil and Chile, freight has increased by 40% and 27%, respectively, since the start of the month. Freight on the USGC-Brazil route of 38,000 tons was last assessed at w175 on February 17, down from w125 on February 1. $1.3 million on February 1.

Additional delays at the Panama Canal also helped to tighten supply in the Atlantic Basin, with transit delays peaking on February 1 at 12 days for southbound transit. Delays at the Panama Canal have since eased, amounting to six days for the southbound transit on February 18.

Shipowners hope continued cargo supplies and tight tonnage in the region will continue to support tanker markets in the Americas, which have been pressured by record bunker fuel prices. The equivalent daily time charter revenue for MRs on the USGC-East Coast of Mexico route was about $24,000/day round trip at a flat rate of $450,000, a shipbroker said. On the 38,000 ton USGC-Brazil route, profits were slightly lower around $10,000/d at a rate of w170. Time charter equivalent revenue does not include daily operating expenses, which are typically around $7,000/d for an MR.

Multi-Year Gasoline Summits

A trader who ships refined products to Mexico said the government was trying to reduce high domestic gasoline prices by capping the special IEPS sales and services tax paid by importers. Platts valuations for gasoline delivered to Tuxpan hit $113.26/bbl on Feb. 14, the highest level since the valuation’s inception in February 2016. It started in 2022 at $89.92/bbl. b and was valued at $110.37/b on February 17.

The IEPS would be added to the costs after delivery, but the government makes it fluctuate weekly, which creates a risk similar to currency fluctuations.

The trader was unsure how long the tax cap would be in place, but said the government was aware of the “high” prices. “They’re trying to help end consumers at the pump,” he said.
Source: Platts

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