Record Number Of Naphtha Transporting Vessels Arriving in Asian Pacific Region, Why?

Ships capable of transporting Naphtha have been coming to the Asian-pacific trade routes due to high demand and wages provided to the ship fleets by the distilleries. Every vessel cannot transport Naphtha due to several technical difficulties. Due to an increase in freight, supply has become more constrained. According to estimates from the shipping sector, there have been more than 60 Long Range fixtures for loading so far in the first half of June compared to roughly 53 in almost the same period last month. The last five trading days have seen prices increase by a staggering 145 Worldscale (average vessel with average costs earning an average rate) points due to a rush of Long-Range fixtures, including at least 10 since late last week to move Naphtha on the Middle East-North Asia routes.

With the demand for transporting Naphtha to African countries and Australia from the Asian distilleries, some trade routes like the Persian Gulf to Australia have high margins cargoes where the owner does not mind high bunker prices. The need for a more significant number of clean trailers and high daily earnings provided to bunkers have led many ships to sail toward Asia for better margins. One of the traders stated, "Owners who positioned their fleet in Asia are reaping the rewards." Long-range ships can earn $55,000, and medium-range ships earn around $60,000 traveling the routes mentioned above, making fleets come to these routes, even from Latin America.

According to ChemAnalyst, the price hike of Naphtha is different from the hike witnessed by the market in March. The previous hike was remarkably due to increased demand from Western European countries because of the war between Russia and Ukraine. Even with the increased arrival of vessels in the Asian Pacific region, the prices of Naphtha in the importing markets increased because most vessels could not transport Naphtha.