The recent strength in the Asian LR tanker market has trickled down into the MR segment. The MR market has firmed lately on the back of busy activity and tight vessel availability in all key regions- AG/West Coast India (WCI), Singapore and North Asia. In the AG/WCI market, firm demand for shorthaul voyages within the region and East Africa runs as well as a tight tonnage list has underpinned MR rates.

Rates for the key AG/Japan route jumped by w5 points w-o-w to w155. Tender data indicates that Tanzania and Kenya are importing around 1.01 mmt of diesel, jet/kero and gasoline in August, up from 503 kt in July. In line with the growth in CPP imports, rates for an AG/EAF run basis 35 kt surged by w22.5 points m-o-m to w197.5. Vessels in Singapore have been ballasting over to the AG/WCI region due to bullish market sentiment as well as higher earnings.

This has in turn tightened prompt tonnage and pushed up MR rates in Singapore, buoyed by higher gasoline imports into Indonesia. Rates for a Singapore/Oz trip basis 35 kt grew by w6 points from last week. As reported by Platts, Pertamina is expected to import up to 9.8 mmb of gasoline in August, up by 13% m-o-m. Planned maintenance at Pertamina’s 125 kb/d Balongan refinery and 348 kb/d Cilacap refinery in September has led to them seeking 6 spot cargoes totaling 740 kb for September lifting. A flurry of third decade August cargoes boosted the North Asia MR segment, supported by a few cargoes fixed to Oz after the unexpected outage at BP’s 146 kb/d Kwinana refinery.

Rates for a South Korea/Singapore run basis 40 kt jumped by $30,000 from last week. North Asian refiners have been running at high utilization rates on the back of peak summer seasonal demand and robust Singapore complex refining margins which are at their highest since end-2016. South Korea’s refinery runs grew by 10.9% m-o-m and 3.9% y-o-y to 3.1 mmb/d in July. With outstanding first decade September cargoes and a shorter position list in the Far East, owner resistance is expected to keep the rally going for now.