VLCC Market Rebounds, Suezmax Stabilizes, While Aframax Shows Mixed Picture

This week has seen a modest softening in the LR2 tanker freight market, particularly in the Middle East Gulf (MEG) region. LR2s (Long Range 2) are product tankers typically ranging from 80,000 to 120,000 deadweight tons (DWT), designed to carry refined petroleum products like gasoline, diesel, and jet fuel.

VLCC Market

The recent slide in the VLCC market has come to an end, with rates beginning to bounce back.

• The rate for the 270,000 mt Middle East Gulf to China trip (TD3C) has clawed back 2.5 points, reaching WS49.40. This corresponds to a daily round-trip Time Charter Equivalent (TCE) of $28,470.
• In the Atlantic market, the rate for 260,000 mt West Africa/China (TD15) recovered three points to WS53.25, providing a round voyage TCE of $33,249/day.
• For the 270,000 mt US Gulf to China route (TD22), the rate has gained significantly, increasing by $164,173 to reach $7,224,173. This translates to a daily round trip TCE of $34,600.

Suezmax Market

The slide in the Suezmax market has almost entirely halted, with rates largely stabilizing or experiencing minor adjustments.

• The rate for the 130,000 mt Nigeria/UK Continent voyage (TD20) saw a slight decrease of one point since last Friday, closing at WS80.39. This translates into a daily round-trip TCE of $29,223.
• The TD27 route (Guyana to UK Continent basis 130,000mt) lost approximately 3.5 points, reaching WS78.47. This results in a daily round trip TCE of just over $27,500.
• The TD6 route of 135,000mt CPC/Augusta was reduced by two points to WS90.39, giving a daily TCE of a little over $26,600.
• In the Middle East, the TD23 route of 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) decreased by 1.5 points to just over WS95.

Aframax Market

The Aframax market presented a mixed picture, with some routes continuing to soften while others firmed up.

• In the North Sea market for the 80,000mt Cross-UK Continent route (TD7), the rate slipped another two points to close at WS118. This yields a daily round-trip TCE of about $28,900 (basis Hound Point to Wilhelmshaven).
• In the Mediterranean, the rate for 80,000 mt Cross-Mediterranean (TD19) slowed its depreciation, losing only one point over the week to WS127.06. This translates to a daily round-trip TCE of a little over $25,000 (basis Ceyhan to Lavera).
• Across the Atlantic, following the 4th of July holiday, rates firmed slightly for the short local voyages. The 70,000 mt East Coast Mexico/US Gulf route (TD26) and the 70,000 mt Covenas/US Gulf route (TD9) are now assessed at WS142.5, climbing one point and five points respectively. This translates into a daily round-trip TCE in the low $27,000s.
• However, the trans-Atlantic route of 70,000 mt US Gulf/UK Continent (TD25) lost ground again, reducing by five points to WS140. This gives a round trip TCE basis Houston/Rotterdam of about $30,800/day.