TC2 NWE MR Market Update

Vessel supply stands at 12 ships in the seven-day ahead window against a 90-day moving average of 16, placing prompt availability four vessels below average. This represents a clear tightening in the tonnage list and provides a supportive foundation for rates, though incremental demand has pulled back by four vessels over the same period, tempering the bullish signal.

Traditional arbitrage economics remain challenging, with Rotterdam to New York naphtha, gasoline and diesel margins deeply negative through June. However, the market is finding alternative demand sources, particularly in Asian destinations, where the MR sector continues to see enquiry despite weaker arb economics to established discharge regions. The spot rate of 233 WS trades eight percent above the seven-day forecast of 218 WS, the model forecast is negatively impacted by the traditional arbs being shut.

Fixture activity over the few days confirms the market’s resilience, with Seaways Warwick fixed at $6.2 million lumpsum for a 27 March laycan from Mongstad to Japan, and FPMC 32 achieving 332.5 WS for an Immingham to UKC cargo on a 25-27 March laycan. Seapike and MH Konpira both locked in 325 WS for Continental to UKC and Continental to Mediterranean cargoes respectively, while PS Tokyo secured $5.4 million lumpsum for a Huelva to Japan voyage. The variety of destinations and the consistent rate levels above 325 WS for regional movements underscore the market’s firmness despite negative transatlantic economics for more tradition arb routes.

The paper market has shown notable strength, with Q2 & Q3 FFAs firming from 220 & 160 WS to 232 & 167 WS, and Q4 climbing marginally from 160 WS to 164 WS. Strength through the forward curve is suggesting the market expects rates to remain well-supported through the second half of the year as geopolitical uncertainty sustains non-traditional cargo demand.

With vessel supply below average, sustained demand for long haul destinations, and the FFA curve firming across the strip, bullish signals are largely aligned in favour of owners. The only bearish signal is that more traditional arb route margins remain negative. Charterers should cover prompt positions now given the tight tonnage list and at least 12 cargoes still competing for available ships, while owners can afford to hold firm on rates as volatility and shifting trade patterns continue to support the upside.