Medium range (MR) tanker rates on the US Gulf Coast to North-West Europe route have plummeted in June as the number of long range (LR) tankers carrying clean products has increased while excess MR tonnage in the region has been reported, the Irish Maritime Development Office (IMDO) wrote in its Shipping Market Review for the Week 25, 2014.
Data from Platts reveals that average MR freight rates for carrying 38,000mt of clean products on the USGC NWE route have amounted to $13.70/mt in June so far–significantly lower than the 2012 and 2013 averages of $16.01/mt and $19.30/mt respectively.
During the second week of June, rates hit 19-month lows at $13.28/mt as a result of excess tonnage in the region, with one shipowner estimating 150-200 newbuild MR tankers in the US Atlantic Basin.
Meanwhile, MR tanker booking levels similarly remained low in the year to date as charterers have preferred to transport diesel on LR2 tankers instead, IMDO said.
Analysis from Platts shows 13.6% of vessels sailing USGC- NWE were LR tankers, which compares with a figure of 10.5% in the previous year and just 6.5% in 2012.
Activity in the European short sea bulk market remained flat to soft last week, according to the latest report from H.C. Shipping & Chartering, as the summer lull set in early.
This time of year–although not typically a buoyant period for the market–has experienced resilient activity in the past, however this year, the market has entered the July/August lull earlier despite even the rise in activity one might expect prior to the pre-summer month/quarter end.
Given the prevailing downward trend over the last number of weeks, the scope for further decline was limited, resulting in rates remaining static if not down slightly on last done.
A continuation of down ward pressure on rates in the short term is projected as activity towards the month end is not expected to provide a significant boost, following which the market enters the summer holiday period proper. On
a positive note, forecasts for a good summer harvest should see increased activity at the end of July.
IMDO, June 25, 2014, Image: aker