Clean MRs and West LRs product tankers are the main "stars" of the market these past few weeks said shipbroker Intermodal in its latest weekly report. According to Intermodal, "following the end of the Eastern holiday, we noticed obvious signs of activity on clean MRs mainly West of Suez, with demand ex-West Africa being a significant factor behind rates moving up to W160 basis 37kmt ex Continent loading. Owners took advantage of this, fact which resulted in TC2 (37kmt Cont/USAC) gaining about 5 more WS points reaching W105. As the tonnage list in the region is getting thinner, should West Africa demand resumes in the following days, this should eventually result in firmer sentiment", said the shipbroker.
According to Intermodal's George Vastardis, Tanker Chartering Broker - CPP Desk, "on the other hand, the USG clean MR market is not as exciting, being still soft for both the short-haul and long-haul voyages to South America or to Europe, having fallen about W10 points to W105 basis 38kmt USG/Continent. Looking ahead, tonnage supply appears ample and most likely will keep the market steady at current levels. Even though the Mediterranean market remained slow during the past weeks, we have been lately noticing signs of a recovery. The delays in the Turkish straits along with a tighter tonnage list and healthier activity has led the market up to W145 basis 30kmt trading cross-Med and about 10 points more for ex Black Sea loading to Med discharge", said Vastardis.
He added that "activity in the West LR market also seems much better during the last couple of weeks, especially compared to the Eastern LR market. Currently, LR2 tonnage for ex-Continent loading is trading at high USD 1M for Japan discharge and at about USD 1.65M for Singapore. In the meantime due to strong demand in West Africa we have seen the LR1 60kmt for the usual ARA/WAF trade going up at around W95, about 2.5 points up when compared to the beginning of the month".
Meanwhile, "East of Suez clean MR tonnage availability and lack of healthy demand have kept the market under pressure, with the cross Middle East Gulf trade earnings at USD mid-hig00k and high900k for UKC discharge. The LR market still seems unable to find more stable footing, as over the past weeks charterers have pushed rates considerably down. The MEG/Japan basis 75kmt naphtha is currently at W91, down about W10 points from last week and the MEG/Japan basis 55kmt naphtha at W92.5 has dropped more than W15 points in just a week's time. Deliveries to UKContinent on LR2 tonnage that concluded over the last week were at USD1.8m, about USD 300k down from the last done and for LR1 at USD low-mid 1m respectively", Vastardis noted.
"To conclude, as far as the Eastern clean market is concerned, our expectations remain fairly low compared to Western market. The distillates arbitrage from the Far East to the West has considerably tightened and this has resulted in very few long-haul cargoes, which eventually means that the only option for LRs currently is to ballast back to the Middle East. This combined with lack of appropriate demand, makes signs of recovery for the LR market hard to spot at the moment, while it also seems difficult for the MR market to considerably improve further", Intermodal's analyst concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
Source: Hellenic Shipping News