Spot rates for MR product tankers in the Atlantic trades have surged to the highest level in about four months as fixture momentum in Europe encountered a tight tonnage list.
The Baltic Exchange’s assessment of time-charter equivalent (TCE) rates on the triangular trade linking Europe, the US East Coast and the Gulf Coast surged 10% on Thursday alone, lifting it to just over $36,600 per day.
That is the highest level since 18 April, when rates were headed downward in a bumpy market that dipped as low as $12,800 per day. And it is above the average daily TCE spot rate of $33,100 over the last 12 months, according to a TradeWinds analysis of Baltic data.
On the TC2 route between Rotterdam and New York, Thursday marked a second day of strong fixture momentum that saw the market surge to WorldScale rates of WS 195 to 200 points, up from just WS 170 on Tuesday, according to data from London shipbroker Howe Robinson.
The firm said a voyage to West Africa could bring a premium of more than WS 15.
“The list remains very tight at the front end, although a couple of MRs failing their subs this afternoon has added a couple more options to charterers with prompt dates,” Howe Robinson said in its daily report.
The strengthening rates in Europe have presented MR tanker owners for vessels that come open on the US East Coast: take the shorter ballast route to the Gulf Coast or steam back to Rotterdam for the frothier earnings.
Spot rates in the Mediterranean were also surging, with the Baltic Exchange assessing the TC6 route from Algeria to southern France at just over $26,000 per day, a one-day gain of 38% and the highest level since 26 April. Despite the recent gains, the figure is below the 12-month average of $37,500 per day in a Mediterranean market that has seen significant surges over the last year.
Howe Robinson said there are “still more legs” in the market with charterers offering higher than the WS 205 rate on Thursday’s last-done deal.
“West Med is the real struggle with very little tonnage available for month end, one stem withdrawing due to no suitable tonnage,” the broker said. “East Med is also very quickly tightening. Owners suggesting more cargoes under the radar, which is further fuelling bullish ideas.”
The Pacific route basket also gained 5.1% to $28,300 per day on Thursday, which marked the highest TCE rate since 5 June, according to Baltic Exchange data.
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