Demand for LR1 clean tankers in Northwest Europe and the Mediterranean has risen this week as naphtha traders attempt to move surplus volumes to the east as per Platts. As a result, several market players indicated that shipping rate for taking naphtha to the east could firm.
The rate for a Mediterranean-Japan voyage for 55,000 mt was in excess of US$1.65 mln on Wednesday with the East-West spread between naphtha prices in Japan and Europe seen to be almost fully covering product movements from the Mediterranean. In December, the route was assessed at US$1.6 mln.
However, traders remain hesitant about whether the naphtha arbitrage had fully opened.
With prompt buying in Northwest Europe slowing as interest from end-users declines, trading sources suspect that any potential shipments to the east from the Mediterranean would be prompted more by a surplus of product in Europe than by rising demand in Asia.
The rate for a Mediterranean-Japan voyage for 55,000 mt was in excess of US$1.65 mln on Wednesday with the East-West spread between naphtha prices in Japan and Europe seen to be almost fully covering product movements from the Mediterranean. In December, the route was assessed at US$1.6 mln.
However, traders remain hesitant about whether the naphtha arbitrage had fully opened.
With prompt buying in Northwest Europe slowing as interest from end-users declines, trading sources suspect that any potential shipments to the east from the Mediterranean would be prompted more by a surplus of product in Europe than by rising demand in Asia.