Singapore (Platts)--25Nov2010/624 am EST/1124 GMT
Worldscale rates on the Medium Range clean tanker vessels from Singapore have gone up, as result of North Asia pulling in a sizable amount of naphtha cargoes, shipping sources said Thursday. The Worldscale rate on the benchmark Singapore-Japan route has jumped by w20 points in the last seven trading days to w150, after staying in the w120-130s over October 29-November 11. The prompt demand for naphtha from North Asia has made buyers there look towards Singapore, Malaysia and Indonesia for the feedstock, said a broker. "Boosting of diesel production comes at the expense of other products like naphtha, propane and butane. The margins are strong and this is the time of the year when refineries stock up on naphtha feedstock," an MR shipbroker said. China, which is facing a diesel shortage, is reportedly increasing its diesel production that has in turn seen a spike in gasoline output which requires naphtha for blending. MRs typically move cargoes sized between 30,000 mt and 40,000 mt. Meanwhile, gasoil and jet cargoes moving from North Asia and Southeast Asia into China, has helped to suck in MR tonnage, sources said. While long haul voyages to Chile and South Africa from the East market has kept MR vessels tied for a longer duration, a chartering source added. "Quite a few" clean petroleum product MR tankers had been fixed for moving palm oil, which has cut supply of these ships for moving naphtha and middle distillate products, the source added. "The MR [market is going] insane ... The fixing window right now is very, very tight," a chartering source said. It was widely heard that very few vessels were available out of Singapore before December 3. "There has been an abnormal number of West Coast India stems for November and early December, which has drawn on the Singapore pool of ships. That said, it is hard to see the trend continuing going into December and the year-end," a chartering source said. "I feel things are somewhat hyped at the moment and hence I believe it's short-lived." --Pradeep Rajan, pradeep_rajan@platts.comSimilar stories appear in Asia Pacific/Arab Gulf Marketscan. See more information at http://www.platts.com/Products/asiapacificarabgulfmarketscan