Product Tanker Markets Improving in Various Routes
While the product tanker market segment hasn’t had the lackluster year of the crude tanker business, things haven’t been all that rosy as well. However, the past few weeks, there has been a positive trend in the freight market. In the MR tanker segment, shipbroker Gibson said in its latest weekly report that “the story of the week in the North has remained the same since the thin list was produced on Monday morning and, with little on offer in terms of natural tonnage owners continued to be in the driving seat. However, Charterers have since backed off somewhat and the resulting lack of enquiry has given Owners few opportunities to make the large gains they might have been expecting. Despite the lack of reliable benchmarks, sentiment remains firm here and we should therefore expect distortion in fixing levels between deals”.
“After a busy start to the week, the Med has seen activity slowly but surely pick off MRs that have shown firm prospects. Monday saw two MRs go on subs and, with one of those failing, opportunities for Charterers to present cargo continued to materialise. The expectation for Owners to piggyback on the success of the recent gains in the Handy market were not realised as full stems were there to be taken. Rates have climbed in line with a steady pace of enquiry with Black Sea – Med reported fixed at ws 172.5. If enquiry continues to flow in week 50, sentiment will remain firm. With Handies showing no sign of letting up, Owners will be looking to make further improvement”, Gibson noted.
Similarly, in the East, the shipbroker said that it was “an incredibly busy week on the smaller tonnage. Having seen the LR2s firm considerably, it was inevitable that Charterers would look to split stems where possible. Longhaul has pressed, with TC12 now at ws 170 levels, and westbound at $1.395million, with the suggestion of higher numbers to come. EAF is now at ws 205, but again we will see a further press early next week. Shorthaul needs some more support, and $225k is the market assessment to finish the week; $625k Gizan into the Red Sea. The LR1s are the underperforming size, but there is still value in the MRs at these levels, so should remain busy next week”.
Gibson added that it was “another strong week for the LRs, with rates pushing further early in the week up to 3 year records, but a quiet end has raised doubts over the longevity. LR2s are still short and rates look solid with 75,000mt naphtha AGulf/Japan at ws 185 and 90,000mt jet AGulf/UKCont $2.80 million. LR1s have never quite hit the highs of the LR2s and still look longer on the list – for now 55,000mt naphtha AGulf/Japan is ws 180 and 65,000mt jet AGulf/UKCont is $1.95 million. But we could easily see these rates drift off slightly if we don’t see a push of cargoes early next week”.
In the Mediterranean, “the momentum seen towards the back end of week 48 continued into Monday, with Owners on the front foot from the off. X-Med stems have consistently traded in the ws 200’s and at the time of writing, the going rate for X-Med stems is 30 x ws 210, with the potential for a few more points ex EMed where the numbers seen ex Black Sea may heighten ideas. 30 x ws 235-240 is the rate achievable for stems ex Black Sea, with the fixing window tonnage extremely tight, delays through the straits will only help Owners’ cause, with the potential for more points in return for safer itineraries. As we move into week 50, with cargoes needing cover before the Christmas break, the momentum seen this week is likely to progress (more so towards the back end of next week), with Owners licking their licks as to future prospects”, Gibson said.
It added that “although it hasn’t been the busiest week of MR action in the Med this week, Owners have continued to reap rewards, with the sentiment by and large being driven by action in the UKCont. A tight front end of the list meant a problematic WAF cargo saw heights of 37 x ws 270 with Med-transatlantic runs trading consistently around the 37 x ws 200-202.5 mark. With profits for runs heading East now tempting, we’ve seen ships begin to ballast through Suez in order to head back where they came from, with an Izmit-AGulf run achieving $1.25 million, with most Owners now freighting Med-AGulf at $1.2 million. Much like the Handies, Charterers will begin to stretch the fixing window next week in order to cover for the Christmas period and this will only add fuel to the fire in this current market”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide