Spot rates for MR tankers are plunging in the Atlantic market, pushing average earnings in the basin to the lowest level since February.
Baltic Exchange data showed that the vessels on the triangular Atlantic trade saw their average time charter equivalent rate fall to just under $20,400 per day on Wednesday, a one-day dip of 4.8% that contributed to a 39.9% slump since this time last week.
The plunge represents a 63.5% decline since 10 February, when the market spiked to the highest level of the year, and is the lowest earnings since 7 February.
Makai Marine Advisors, the UK-based consultancy led by tanker analyst Jeffrey McGee, said on Twitter that a “collapse” on the fronthaul TC2 route from Rotterdam to New York was driving the latest downward push.
TCE earnings on the route reached $14,400 per day on Wednesday, have fallen 56.8% in the last week alone and 67.7% since the February peak.
On the reverse direction from the US Gulf Coast back to Europe, rates have fallen further since that spike. The $5,907 reading on Wednesday was a 22.9% slump in the last seven days but a 75.9% drop since 10 February.
“We have shown the demand seasonality for both TC2 and US Gulf diesel exports, and this is looking decidedly counter-seasonal,” Makai Marine said on Twitter.
Adding insult to injury, Atlantic MR tanker futures lost some of their optimism, although the curve is still pointing higher.
With a fixture on the TC2 route priced at WS 148 in Worldscale terms, May contracts dipped 2.1% to WS 169 while June forward freight agreements lost 1.8% to WS 175.
In the Mediterranean, earnings on the TC6 from Skikda in Algeria to the French port of Lavera fell to $16,400 per day for a non-eco vessel, according to data from Howe Robinson. That is down from $26,000 per day a day earlier and is a far cry from the $67,000 per day that could have been earned a week earlier.
