Firm naphtha demand and discount to LPG prices has boosted naphtha volumes. At the same time LR2 tankers are involved in trades of other products, letting LR1 to gobble up market share out of the Middle East.
Elevated naphtha exports from Europe supported long-haul voyages in favour of LR2 tankers. Yet, will this trend contribute to uplift LR2 freight rates?
As naphtha continues to find outlets towards the East, LR2 utilisation is on the rise in March, helping resurrect rates from multi-year lows. But widening LPG discounts to naphtha are expected to put a lid on Asia's naphtha imports in the coming months.