Tofteviken lr2 tanker product taurus

Clean Transatlantic Tanker Rates Stay Weak On Slow Demand

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October 16, 2013

Tofteviken, ex-Torinia, an LR2 tanker built in 2005 by Samsung Heavy Industries, image (c) Taurus Tankers

reuters logoLONDON, Oct 16 (Reuters) – Transatlantic clean tanker rates stayed pressured on Wednesday as slow bookings and a build up of vessels took their toll on sentiment.

Rates for medium-range (MR) tankers for 37,000 tonne cargoes on the TC2 route from Rotterdam to New York were at W70.00, or -$3,037 a day when translated into average earnings.

That compared with W69.58 or -$3,315 a day on Tuesday and W70.00 or -$3,079 last Wednesday. Average earnings fell to a new all-time low on Tuesday since they were first compiled in 2008, exchange data showed.

“Product carriers remain under pressure in both hemispheres. Activity levels out of the UK/Europe and US Gulf regions have been quiet,” said Global Hunter Securities on Wednesday.

Average earnings per day are calculated after a vessel covers its voyage costs such as bunker fuel and port fees.

“The MR market looks soft on both sides of the Atlantic,” broker Fearnleys said separately on Wednesday.

Long Range 1 tankers, carrying 55,000 tonne loads from the Middle East Gulf (MEG) to Japan, reached W102.50 or $7,187 a day.

That compared with W102.55 or $7,411 a day on Tuesday and W110.38 or $10,815 a day last Wednesday.

“LR1s are not clearing out fast enough and that leaves the market stuck,” Fearnleys said.

Larger Long Range 2 or LR2, 75,000 tonne shipments on the Middle East Gulf to Japan route, were at W96.27 or $13,707 a day. That compared with W96.55 or $14,055 a day on Tuesday and W98.45 or $15,541 a day last Wednesday.

While the overall products tanker market has shown signs of recovery in recent months due to firmer activity, a recent ordering spree by ship owners seeking to be positioned ahead of full recovery, could temper prospects, analysts say.

“Demand growth needs to pick up for clean tankers … because enthusiasm for this segment has already caused the orderbook to swell,” RS Platou Markets said in a report.

Read: Maersk to Order 10 New Product Tankers?

“The relatively high orderbook and young fleet, average age seven years, also illustrate that this segment is becoming vulnerable should the economy fail to undergo the expected upswing.” (Reporting by Jonathan Saul, editing by William Hardy)

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