Transatlantic clean ship rates capped by slower bookings
Clean tanker rates for refined petroleum products on top export routes were steady on Monday with slower business and a growing surplus of vessels keeping a lid on earnings in the transatlantic market, Reuters reports.
Rates for medium-range (MR) tankers for 37,000 tonne cargoes from Rotterdam to New York were at W124.17, or $6,491 a day when translated into average earnings, compared with W124.79 or $6,398 a day on Friday and W130.00 or $7,555 a day last Monday.
"MR vessel supply on the Continent rose last week, seemingly boosted by a recent influx of ships performing backhaul transatlantic voyages. This, combined with reduced enquiry, saw rates fall five points," broker SSY said on Monday.
In September, MR rates reached their highest in six months.
"A slightly disappointing week on the Continent as a lack of cargo enquiry cools the market down," broker E.A. Gibson said.
In April last year, rates reached their highest since 2008 on a jump in U.S. gasoline demand, helping reduce the number of tankers available for hire. Since then, average earnings have remained volatile.
Average earnings per day are calculated after a vessel covers its voyage costs such as bunker fuel and port fees. Negative rates indicate costs are greater than earnings.
Analysts said reduced refinery capacity in the Atlantic Basin could boost long-haul demand for the wider products tanker sector in coming years, helped by the delivery of fewer tankers.
Typical Long Range 2 or LR2, 75,000 tonne shipments on the Middle East Gulf to Japan route were at W105.68 in the worldscale measure of freight rates, or $11,988 a day when translated into average earnings, from W104.50 on Friday or $11,305 a day and W101.25 or $10,052 a day last Monday. In July rates hit their highest level since late October of 2011.
Brokers said the LR2 market saw brisk demand to book vessels in recent days.
Long Range 1 tankers, carrying 55,000 tonne loads from the Middle East Gulf to Japan, were at W114.50 on Monday, from W113.33 on Friday and W107.86 last Monday.
"The MEG LR market was bolstered by plentiful activity, as westbound middle-distillate flows increased. This saw tonnage tighten, and allowed the benchmark 55,000 MEG - Japan market to rise," SSY said.
In the Mediterranean, 30,000 tonne shipments ex-Algeria to southern Europe were at W168.06 on Monday, versus W167.67 on Friday and W158.28 last Monday.
