Image: Frontline Tankers
SINGAPORE (Dow Jones)–Asia’s freight markets for vessels carrying clean petroleum products may stay bullish in the coming week due to firm demand for light distillates, while crude tanker rates appear to have found a floor.
The rate for a 55,000-metric-ton LR-1 cargo from the Middle East to Japan was assessed Tuesday at Worldscale 144.69, its highest level since early May, while the rate for a 75,000-ton LR-2 cargo for the same route was little changed from last Tuesday at W124.88, according to the Baltic Exchange.
Recovering demand for naphtha is supporting rates, as some crackers in Japan and Taiwan are scheduled to resume operations in October after maintenance.
“A resurgence in eastbound naphtha fixing last week allowed the LR market to firm significantly,” said broker Simon, Simpson & Young in a research note.
The rate for a 30,000-ton tanker from Singapore to Japan slipped to W158.57 from W159.14, though the downside is likely limited due to healthy gasoline demand from Vietnam and Indonesia.
The spot rate for a 260,000-metric-ton Very Large Crude Carrier from the Middle East to Japan recovered to W46.76 Tuesday from W45.31 a week ago. Owners made $1,034 a day in profits on VLCC leasing this week compared with losing $801 a day a week ago, thanks to declining bunker prices.
The VLCC market appears to be finding temporary relief after owners completed fixing of August-loading lots. Around 108 cargoes have been fixed for lifting in August, up from 102 lots a year ago, data from Meiwa International showed.
However, the market still lacks upward momentum, as vessel availability remains high next month, shipbrokers said.
The rate for a VLCC from West Africa to China hovered around its year-to-date low of W43.22 Tuesday, while the 80,000-ton Aframax rate from Southeast Asia to the east coast of Australia eased to W95.11 from W96.28.
-By Max Lin, Dow Jones Newswires