Product tanker rates have lost ground over the past week as a build-up of ships in ballast in the Middle East weighs down the market, brokers say.
Clarksons Securities quoted eco LR2 tankers as earning $46,600 per day on Monday, down 5.1% in a day and 23% over seven days.
Eco LR1s lost nearly 5% and 17% over the same period at $42,000 per day.
UK shipbroker Gibsons said rates for a 75,000-tonne naphtha cargo heading from the Middle East Gulf to Japan dropped from Worldscale 250 to WS 215 and then down to WS 190, “with the potential for more pain to come”.
The jet fuel market for a 90,000-tonne cargo from the Middle East Gulf to northern Europe has not yet been tested.
But the London shop said no charterer would be paying more than a lump sum of $5.5m, about $1m below the last-done level on Friday.
“With the Eid holidays approaching, brokers believe that a strong rebound within the next few weeks is unlikely,” Clarksons Securities said.
A lack of cargoes has offset a tight tonnage list west of Suez, the investment bank added.
Analysts led by Frode Morkedal said: “As seasonal turnarounds, including from the Middle East, come to an end, refinery runs are expected to increase significantly through the second quarter of 2024. This is good for product tankers because shipments should increase.”
Gibsons said the quiet week after Easter “damaged freight considerably”.
Limited cargoes
“The rot had started prior to the weekend, but with limited cargoes since then, the LR2s in particular have seen disappointing results,” the broker added.
The company said LR1s had fared slightly better, with short hauls continuing to fix: “Until we see more of the volume coming back into the market, these rates will continue to fall away — and with the Eid holiday in only a few days, this may not be for a couple of weeks.”
In the Mediterranean, handysize tankers experienced a lacklustre week.
Rates were under pressure as tonnage built up over the Easter weekend, Gibsons said.
Mediterranean MRs were steady during the week.
Clarksons quoted eco MRs at $42,100 per day.
