Infographic: CPP Flows & Freight – October 2020 Snapshot

Infographic: CPP Flows & Freight – October 2020 Snapshot

See our infographic detailing recent clean petroleum product flows and associated variations in freight rates for the month of October 2020

22 October, 2020
Vortexa Analysts
Vortexa Analysts

data showing global cpp flows and freight rates month-on-month

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Key Takeaways:

  • The global build of unemployed tonnage is the cause of recent weakness and a bleak outlook in clean tanker freight markets, as evidenced by a month-on-month drop in freight rates across 4 out of 5 routes analysed.
  • As MR1 tonnage left SE Asia to chase better opportunities elsewhere, the idiom that shipping is all about timing rings true. The resulting lack of tonnage in the region drove a 27% increase in the cost of freight per ton even as cargo flows towards Australia softened.
  • The surge in volumes in the LR2 Mediterranean to Japan route was only strong relative to a previous month with zero loadings as the arbitrage was shut due to higher freight rates. Since then, with LR2 tanker utilisation still recovering from yearly-lows in August 2020, cargo volumes from the Mediterranean were unable to prevent rates from falling 31% month-on-month.
  • With CPP flows towards Latin America down 9%, MR2 tankers sought employment trans-Atlantic – pushing rates down 30% even as flows to PADD 1,  rose 7% month-on-month driven partly by increased demand for winter spec gasoline.
  • Looking ahead, with utilisation back to pre-pandemic levels, there may be some support to freight rates as long as cargo volumes don’t fall further.
Vortexa Analysts
Vortexa
Vortexa Analysts