ASIA TANKER: CPPs Strong On Naphtha Demand; VLCCs Underperform

oil tankerSINGAPORE (Dow Jones)–Asia’s clean-petroleum tankers market will likely stay supported by increasing naphtha demand in the coming week, while slow chartering activity continues to pressure crude tanker rates.

The freight rate for a 75,000-metric-ton LR-2 cargo from the Middle East to Japan was last assessed Monday at Worldscale 128.21, its highest since mid-May, compared with W119.88 a week ago.

The rate for a 55,000-ton LR-1 cargo for the same route surged to W128.50, a level not seen since mid-June, from W124.81, the Baltic Exchange said.

The rates may continue to rise as booking of August-loading cargoes enters full gear, with Taiwanese naphtha demand recovering after recent cracker outages, shipbrokers said.

Also, the rate for a 30,000-ton tanker from Singapore to Japan edged up to W147.43 from W146.86 despite a fall in gasoline shipments from Taiwan and China. Brokers said the drop didn’t have much impact on this route.

The rate for a 260,000-ton Very Large Crude Carrier from the Middle East to Japan fell slightly to W49.71 Monday from W50.26 a week ago, underperforming market expectations.

Data from Meiwa International showed a slow pace of chartering, with only 33 cargoes fixed to be loaded in August so far.

“The market has been disappointing…but further looking, owners may not be willing to accept lower rates because of high bunker prices,” a North Asian broker said.

The rate for a VLCC from West Africa to China weakened to W47.50 from W47.67, as the 80,000-ton Aframax rate from Southeast Asia to the east coast of Australia softened to W97.17 from W97.33.

-By Max Lin, Dow Jones Newswires