MARKET COMMENTARY

The LR2 market is currently at its firmest over the last 4-5 weeks. Most fixtures are being concluded at W120, boosting daily earnings slightly above the 10k/day mark. Rates have shot up by 30 world scale points within the week alone. Rates for the AG/West route have increased significantly as well, up by at least USD250k. With a tightened position list up to 1st half March, Owners have more potential in seeing an upward move on the rates. On the downside, the spike in rates is likely to be short-lived as the surge in cargo volumes seems unsustainable. The redelivery of ships that were taken away from the market on short-term t/c could eventually weigh on rates once more.

The trend seems to have reversed, with LR2 rates per ton now higher than LR1s. This may entice Chtrs to turn to LR1s  as there is more vsl supply.

Things are not looking too bright on the MRs either. With muted activity in SouthEast Asia causing ships to ballast to the Ag/WCI region, it looks as though the rates will come off even more. The only active region currently is the North Market.