04-08-2016

UKC-USAC MR tanker freight rates route hit near 7-year low on ample tonnage

VLCC

Medium range tanker freight rates for ships sailing the Northwest Europe-US Atlantic route, basis 37,000 mt, hit their lowest in nearly seven years Tuesday on little demand to cover the long tonnage list in Europe, shipping sources said Wednesday.

S&P Global Platts data show MR tanker rates on the NWE-USAC trip edged lower by Worldscale 2.5 to w82.5, equivalent to $11.79/mt, which was the lowest since August 28, 2009 when the rate was $11.74/mt.

Early on Wednesday at least three ships were heard on subjects w2.5 lower at w80, equivalent to $11.43/mt.

“Always there is a question if the rates are going to move down any further; and to be honest you probably you will see less here or there, but under what circumstances will be important, i.e. the cargo history, prompt loading, and what the voyage is, for example, if it’s going to the east coast of Mexico etc,” a shipbroker said.

“Rates are super low. [It] will take a lot more cargoes to pull them up,” another shipbroker said.

According to shipbrokers’ position lists for MR tankers in Europe, there were more than 30 ships available until August 20, and even more expected by end of the month. However, very few ships have gone on subs so far in the first week of August putting freight rates under pressure.

Source: Platts

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