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Show Me The Money: MR TCEs may rally amid higher freights due to tightening space

18 October 2019

Eastport MR TCE index against actual 1Y TC rate

The Eastport MR TCE index measures the theoretical profitability of a 5-year-old 52kDWT chemical/product tanker carrying bulk chemicals on a typical ME Gulf eastbound voyage, and back with palm oil cargos. Both chemical and palm oil freights rose from September but the increase was outpaced by the jump in bunker expenses. MR TCEs dropped 16% MoM in early October. The recent rally in clean petroleum product (CPP) freights could benefit chemical spot market as MR space tightens (see 17 October’s issue, cover page). In addition, some owners may start to switch to compliant fuel in 4Q, and are likely to request for higher freights. Against a backdrop of increasing rates, TCEs may bounce back. Please refer to October issue of Show Me The Money: TCEs may rally after grim September for TCEs in other benchmark sizes.

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