The LR2 tanker market in the Middle East Gulf (MEG) experienced a downward correction over the past few days, after peaking at the end of last week, reports Baltic Exchange.
VLCC
The VLCC (Very Large Crude Carrier) market experienced a significant downturn this week, with rates falling across all major routes.
For the Middle East Gulf to China trip (TD3C), the rate for a 270,000 mt cargo plummeted by 8 points to WS52.10. This corresponds to a round-trip Time Charter Equivalent (TCE) of $32,294 per day.
In the Atlantic market:
- The rate for a 260,000 mt cargo from West Africa to China (TD15) dropped by 7 points from the previous week, settling at WS53. This yields a round voyage TCE of $33,867 per day.
- The rate for a 270,000 mt cargo from the US Gulf to China (TD22) saw a substantial fall of $522,167, bringing the lump sum to $7,312,333. This translates to a daily round trip TCE of $36,266.
Overall, the market has seen a steeper decline this week compared to previous weeks, indicating a weakening trend in VLCC freight rates across global routes.
Suezmax
Suezmax owners demonstrated resilience this week, absorbing most of the market pressure, with rates on the four Baltic routes experiencing only a slight easing.
Specifically:
- The rate for the 130,000 mt Nigeria/UK Continent voyage (TD20) remained relatively flat at just over WS77.5, translating to a daily round-trip TCE of just under $30,000.
- The TD27 route (Guyana to UK Continent basis 130,000 mt) saw a minor slip of one point to just above WS76, yielding a daily round trip TCE of approximately $28,000 based on discharge in Rotterdam.
- The TD6 route of 135,000 mt CPC/Augusta eased by 2 points to the WS97.5 level, providing a daily TCE of about $34,500.
- In the Middle East, the rate for the TD23 route of 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) slipped 1.5 points to just below WS85.
Despite the overall downward trend seen in the VLCC market, Suezmax owners managed to largely withstand significant rate drops this week across these key routes.
Aframax
The Aframax tanker market is showing a mixed performance across various routes, with some areas experiencing rate declines while longer-haul transatlantic voyages demonstrate more stability.
In the North Sea market:
- The rate for the 80,000 mt Cross-UK Continent route (TD7) eased by 3 points to just over WS122. This translates to a daily round-trip TCE of approximately $35,300, based on a voyage from Hound Point to Wilhelmshaven.
In the Mediterranean:
- The rate for the 80,000 mt Cross-Mediterranean route (TD19) saw a more significant fall of 15 points, settling at approximately WS119. Based on a Ceyhan to Lavera trip, this yields a daily round trip TCE of about $23,400.
Across the Atlantic:
- Rates for shorter-haul voyages continued to drop:
- For the 70,000 mt East Coast Mexico/US Gulf route (TD26), the market fell by about 7 points to just below WS119, showing a daily round trip TCE of approximately $19,000.
- The rate for the 70,000 mt Covenas/US Gulf route (TD9) is currently 11 points weaker than a week ago, hovering at the WS112.5-115 level, giving a daily round-trip TCE of around $18,500.
- Conversely, the longer-haul Trans-Atlantic route (TD25) for 70,000 mt from the US Gulf to the UK Continent remained stable at the WS120 level. This provides a round trip TCE of $25,532 per day, based on a Houston/Rotterdam voyage.
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Source: Baltic Exchange
