Thinking Outside the MR Tankship Rate Triangle

Posted by George Backwell
Tuesday, April 22, 2014
MR Tankship: File photo

Although US refined products exports largely underpin medium-range (MR) product tanker demand in the Atlantic Basin, there is little evidence of similar stability in US Gulf – UK Continent (TC14) freight rates, find shipping industry advisors Poten & Partners in a recent study. Excerpts as follows:

In many of the crude oil trades, high demand for crude oil in a particular market leads to high demand for ships and, often, robust freight rates. Because the Atlantic Basin refined product market is short-haul in nature and driven by traders’ arbitrage activities, it is far more fickle.

Teasing out trends in the to and fro trades between the US and Europe can be quite challenging, as product prices, freight rates and where the cargo ultimately ends up are highly interdependent. For shipowners, the ability to secure cargoes and get paid roundtrip freight in both directions is an attractive proposition, yet one that is without guarantee. Furthermore, the seemingly inverse relationship in freight rates between the two benchmark transatlantic trades may highlight just how savvy charterers have become.

On an annualized basis, the number of cargoes moving from Europe to the United States appears to be on the rise. There have already been 105 fixtures reported this year, suggesting that 2014 volumes could more in line with previous years.

With incremental cargoes moving from the US Gulf to the Caribbean and Latin America, the near-perfect vessel utilization opportunity historically achieved on the transatlantic trade begins to break down.

Instead of ships becoming available in Europe and the US Gulf, the dislocation of supply to places farther south, reduces overall asset utilization on a ship-by-ship basis. If this trend continues, each MR would be capable of carrying fewer cargoes per year. This is a double-edged sword for shipowners in the MR space, however. Although a vessel may have less of an opportunity to increase days for which it is paid double hire, the general increase in trade length is positive for ton-mile demand.

Again, say Poten & Partners all positive demand indications should be taken with extreme caution; the 300+ MR orderbook is still a scary prospect.

Source: Poten & Partners
www.poten.com

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

Diana Shipping Nets 2Q Loss

Diana Shipping Inc. today reported a net loss of $14.1 million and net loss attributed to common stockholders of $15.5 million for the second quarter of 2015, compared to net loss of $5.

U.S. Drillers Add Rigs Despite Crude Collapse

U.S. energy firms added 5 oil rigs this week after putting 21 rigs into service last week, the most in over a year, despite a collapse in U.S. crude prices from recent highs in June,

Tanker Trends

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

Diana Shipping Nets 2Q Loss

Diana Shipping Inc. today reported a net loss of $14.1 million and net loss attributed to common stockholders of $15.5 million for the second quarter of 2015, compared to net loss of $5.

US Senate Energy Panel Votes to Lift Oil Export Ban

The U.S. Senate Energy Committee on Thursday passed a bill that would lift a decades-old ban on the export of crude oil.   The 22-member panel passed the bill

Finance

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

Diana Shipping Nets 2Q Loss

Diana Shipping Inc. today reported a net loss of $14.1 million and net loss attributed to common stockholders of $15.5 million for the second quarter of 2015, compared to net loss of $5.

U.S. Drillers Add Rigs Despite Crude Collapse

U.S. energy firms added 5 oil rigs this week after putting 21 rigs into service last week, the most in over a year, despite a collapse in U.S. crude prices from recent highs in June,

Logistics

Optimized Tug-Barge System Designs by Robert Allan

Optimized Tug-Barge System Designs by Robert Allan Ltd. by David R. Connand Robert G. Allan, P.Eng. Some veteran Mississippi pushboats and barges have been

WKCTC to Host Open House for ILM Institute

West Kentucky Community and Technical College will host an open house and ribbon cutting for the Inland Logistics and Marine Institute August 10 from 4 ­– 6 p.

U.S. Drillers Add Rigs Despite Crude Collapse

U.S. energy firms added 5 oil rigs this week after putting 21 rigs into service last week, the most in over a year, despite a collapse in U.S. crude prices from recent highs in June,

 
 
Maritime Careers / Shipboard Positions Maritime Security Naval Architecture Navigation Pipelines Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1317 sec (8 req/sec)