Charterers secured more LR1 tonnage as spot markets saw a volatile week of trading.

The benchmark LR1 route from the Middle East Gulf to Japan reached Worldscale (WS) 115 last Friday, the highest level year-to-date.

Aramco Trading Co was reported to have fixed vessels at WS 115 and WS 120 for March laycan. ST Shipping was also said to be in the spot market, chartering a vessel at WS 115.

Brokers attribute the strength to the ongoing turnaround season in the East of Suez market. Indian refineries, which have turned into export powerhouses for refined products, are among those planning to close for maintenance.

Cargo commitments

Traders are now forced to scramble for ships to cover the cargo commitments.

“Rates are all over the place,” one spot tanker broker said.

Despite the volatile short-term market, charterers have been able to take advantage of ample supply to secure period coverage.

Flopec of Ecuador has emerged as the charterer that renewed contracts with US-listed tanker owner Tsakos Energy Navigation (TEN) in a $70m deal, which the Greek company announced last month without naming the counterparty.

The seven LR1 tankers were taken for another two years each at an average of $13,900 per day. The deal includes a profit share element.

Nikolas Tsakos-led TEN did not identify the tankers, but the company has 11 LR1 vessels in total and has extensive cooperation with Flopec.

Flopec fixtures

In 2016, five of these tankers, the 68,000-dwt Andes, Maya and Inca (all built 2003) and 74,000-dwt World Harmony and Chantal (both built 2009), were fixed for 22 months to Flopec at $19,700 per day.

Formosa Plastics has also fixed out a LR1 tanker. Trafigura has taken the 70,000-dwt FPMC P Alpine (built 2004) for a year at $11,200 per day plus a profit split. Koch has also taken a LR1 tanker, the 74,000-dwt Neptun D (built 2004), from Reederei Nord.

The ship is fixed for six months with an option for six more. No rate has been disclosed. The tanker is currently on charter to Koch at $13,000 per day.

Harmony to NYK

In the MR segment, NYK Line is said to have chartered the 50,000-dwt Unique Harmony (built 2012) rather than Norden, as previously reported.

The Unique Shipping-controlled tanker is fixed for a year at $13,800 per day.