US Gulf MRs rebound yet again after correction

Medium range (MR) clean tanker rates in the US Gulf coast have once again rebounded from a a sharp correction after a rush of export activity this week tightened available tonnage in the region.

Since 20 September, the US Gulf coast-Pozos MR tanker rate has doubled to $1.8mn lump sum after falling by 43pc to $900,000 between 14 and 19 September. The time charter equivalent rate on the route, which represents the $/d earnings or loss for a shipowner, has nearly tripled to $71,731/d since 20 September after falling by 58pc to $24,576/d between 14 and 19 September.

This week's gains were driven by a rush of Caribbean and west coast South America-bound export demand, which along with Mexico and Brazil have been the main demand centers for US spot refined product exports over the past eight months.

At the start of today's trading session, six MR tankers were available to load in the US Gulf coast during the next five days, down from 15 on 19 September, according to a shipbroker.

Rates have also received support from delays at east coast Mexico ports, which has helped limit tonnage replenishment. At 1pm ET, 14 MR tankers (seven laden) were waiting outside of the port of Tuxpan, and 10 MR tankers (eight laden) were waiting outside of Pajaritos, according to Vortexa data. When Mexico ports are running efficiently, vessel queues are usually shorter than a half dozen vessels.

Endless rollercoaster

This most recent rally marks the seventh time since March that US Gulf coast MR tanker rates have bounced back shortly after a downward correction.

Scorpio Tankers chief executive Robert Bugbee noted this volatility at a panel in New York

earlier this week. "And that hasn't been a steady move. You've had a move upwards, to consolidating downwards, to move upwards, consolidating down," he said. "On a technical basis it's been very strong. Every dip has been to a higher low."

The US Gulf coast-Pozos rate slid to a trough of $900,000 during this most recent correction, the highest of any this year. The average trough reached during the prior six slides has been $672,500.

Rates are now approaching all-time highs. The US Gulf coast-Pozos rate is currently 13pc below the all-time high of $2.075mn set on 11 April and 3 August.

By Michael Connolly