Freight Rate Downturn Continues

The downhill slide in freight rates for long range (LR) cargoes of petroleum products from the Gulf steepened last week as cargo awards failed to emerge, brokers said. Rates for LR-2s (75,000 tons) have been slipping since the start of June, losing about 15 points each month to reach W200 ($25.48 per ton) on August 10. But since then they have lost another 15 points in just two weeks to hit W185 ($23.57 per ton) at the end of last week, brokers said. Gibsons issued a rate warning for LR-2s at the start of August when it noticed a build up of tonnage within the Gulf. Signs of recovery appeared to be absent, with Oslo broker Fearnleys saying last week that most September cargoes had already been booked. Fearnleys said that rates for intra-Asian trades on 30,000 tonners slipped below the W200 mark to reach W195 last week. The market has been heading downwards since two months of stability at W295 were smashed in mid-June. Increased transpacific trade from Asia to the U.S. failed to improve the supply-demand balance for ships in Asia, brokers said. Oslo brokers said Glencore had booked two transpacific voyages. Clean tanker fixture lists showed continued interest in moving cargoes across the Atlantic from Europe, but rates remained flat at around W215 ($20.04 per ton), basis 35,000 tons. Caribbean activity quickened towards the end of last week, brokers said, with 30,000 ton upcoast cargoes fixing at W240-245 and 40,000 tons being done at W185 ($7.20 per ton). - (Reuters)