Faced with delays transitioning through the Turkish Straits due to bad weather, naphtha lifters have decided to charter Medium Range tankers for the Mediterranean to Japan product flow instead of the usual Long Range vessels.
Ships of 200 meters length face delays of up to 19 days northbound, begging the question whether they are able to meet the laycan dates agreed with charterers to load naphtha cargoes.
As such, charterers originally decided to split cargoes into Handysize stems not subject to the same delays and then use ship-to-ship transfer to load on to Long Range tankers before sailing to Japan.
However, the explosion in Handysize freight rates ex-Black Sea, reaching a Worldscale 40 differential with cross-Mediterranean freight rates on the same basis has led them to reconsider their options.
Three Medium Range tankers destined for the East were placed on subjects Friday. The cargoes, which are expected to load around February 18 in the Black Sea, include the High Efficiency, Torm Resilience and BW Wren. They were chartered by Litasco at lump-sum rates of $1.565 million and $1.55 million, respectively.
As a consequence of the shifts in freight logistics, naphtha market participants active in the region have noted a stronger Eastern complex due to expected delayed arrivals of the cargoes.
That in turn has also led sources to forecast a reduction in resupply from the Mediterranean to the North.
“I don’t see fundamentals moving much apart from bad weather in the Mediterranean, the East is looking better and this should mean less resupply,” said one source.
According to sources in Asia, refinery turnarounds in the Middle East and additional spot buying requirements ahead of upcoming public holidays have also added to the supply tightness in the region.
Sea News, February 5