Freight rates for product tankers remain exceptionally high on some routes. Shipowners are currently able to generate high revenues, particularly in the Persian Gulf. In other trading areas, however, the market is softening.
For LR2 product tankers, calculated daily earnings of more than $300,000 are now being achieved on certain routes. This is according to the latest weekly report from the long-established London-based industry platform, the Baltic Exchange. Rates are particularly high for shipments from the Persian Gulf to Asia and Europe.
On the route from the Persian Gulf to Japan (TC1), the Worldscale Index for 75,000-tonne cargoes rose by 92 points to WS 1,075 within a week. The daily revenue calculated on a round-trip basis (Time Charter Equivalent, TCE) rose by $28,600 to $313,200.
The Baltic Exchange reports even higher earnings for the westbound route from the Persian Gulf to north-western Europe (TC20). For shipments of 90,000 tonnes, the freight rate rose by $168,800 to $21.51 million per voyage. This results in a calculated daily revenue of $336,400.
Meanwhile, the market in the Mediterranean took a different turn. On the LR2 route from the Mediterranean to the Far East (TC15), the freight rate fell by $4.24 million to $12 million. The corresponding daily revenue fell by $57,900 to $115,100.
Smaller product tankers are also benefiting
Rates also rose in the LR1 segment. For shipments of 55,000 t from the Persian Gulf to Japan (TC5), the Worldscale Index rose by 121 points to WS 1105. The calculated daily revenue thus reached $229,900.
On the route from the Persian Gulf to north-western Europe (TC8), the cost of a voyage carrying 65,000 t of cargo rose by $392,900 to $16.28 million. The corresponding TCE figure rose by $6,500 to $250,500 per day.
By contrast, earnings are significantly lower on key Atlantic routes. For MR tankers carrying 37,000 t of cargo from the ARA region (Amsterdam, Rotterdam, Antwerp) to the US Atlantic coast, the Baltic Exchange calculates daily earnings of $12,900. That is $1,800 more than in the previous week. On the route from the US Gulf to north-western Europe, rates of $53,900 per day are being achieved for 38,000-tonne cargoes, an increase of $1,100.
Rates also rose in the Handymax segment. For shipments within the Mediterranean, the calculated daily revenue rose by $20,700 to $109,600. On the intra-European route between the UK and continental Europe, it increased by $20,900 to $67,900.
The figures illustrate how unevenly the product tanker market is currently performing. Whilst shipowners are able to achieve particularly high earnings on routes from the Persian Gulf, figures in the European and Atlantic markets are in some cases considerably lower.
The TCE figures reported by the Baltic Exchange are standardised calculations based on the respective freight rates and voyage assumptions. They should not be equated with actual time charter rates agreed in practice.
