Naphtha Redemption Redux for LR1s

As we noted in this space in April of this year, a surge in Asian naphtha demand provided a brief respite for LR1 tanker owners operating along the benchmark Baltic TC5 route. We likewise noted that the rate spike was unsustainable, and rate gains indeed subsided a few months later as naphtha demand growth was tempered. However, a recent increase in LR1 fixtures has generated a renewed surge in spot rates as LR1s have reached peaks of $19,100/day – up from $7,600 at the beginning of October. Spot rates should again subside as they attract increased tonnage from the supply-side of the market. Download here