MB Capital Strategies Glossary — Updated June 2026
Day rates ($/day) are the daily hire charges for using a vessel or offshore drilling rig. They are the primary revenue metric in shipping — every vessel earns money based on what it charges per day, whether that's a fixed time-charter rate or a converted spot market TCE equivalent.
For investors, day rates are the leading indicator: day rates today → cash flow next quarter → dividend the quarter after. Understanding where day rates are in their cycle is more important than analyzing P/E ratios for shipping stocks.
| Vessel Type | Current Range ($/day) | Cycle Mid-Point | Driver |
|---|---|---|---|
| VLCC (crude tanker) | $25,000-55,000 | ~$35,000 | OPEC+ output, Russia rerouting |
| Suezmax | $20,000-45,000 | ~$28,000 | West Africa/Russia crude flows |
| LR2/Product tanker | $15,000-40,000 | ~$22,000 | Refinery imbalances, EU energy |
| MR tanker | $10,000-30,000 | ~$17,000 | Clean product trade flows |
| LNG Carrier (TC) | $60,000-80,000 | ~$70,000 | Long-term contract market |
| VLGC (LPG) | $30,000-75,000 | ~$45,000 | US LPG exports, Middle East flows |
| Capesize (dry bulk) | $10,000-50,000 | ~$18,000 | China iron ore/coal imports |
Source: Industry data (Clarkson Research, Pareto Securities, Q1 2026 earnings calls). Ranges are cyclical — not guaranteed forward-looking.
The math is direct:
The key question is not just the absolute day rate but the spread over OpEx (operating costs). A vessel with $10,000/day OpEx earning $30,000/day has a $20,000/day cash margin. A vessel with $15,000/day OpEx (older, less efficient) earning $30,000/day only has a $15,000/day margin — 25% less cash for dividends.
This is why newbuilding (modern, fuel-efficient vessels) tend to trade at premium valuations: lower OpEx = higher cash margins at the same freight rate. This is also why environmental regulations (EEXI/CII) are raising OpEx for older vessels, gradually squeezing their economics.
Spot day rates change daily. Time-charter rates are set at contract signing and reflect the market's forward expectation. When spot rates spike above TC rates, it signals short-term tightness. When TC rates exceed spot, charterers expect rates to rise and are locking in supply. Monitoring the spot/TC spread gives early cycle signals.
TCE Rate · Day Rate (singular) · Charter Rates · Freight Rates · Time-Charter · Spot Market
About Marco Bozem · Full Glossary · Best Tanker Stocks 2026
Marco Bozem
Investor & Analyst | Hard Assets, Dividends, Shipping | MB Capital Strategies
Marco analyzes commodity and dividend stocks with focus on Shipping, Mining, and Energy. All analysis is based on publicly available reports and personal judgment. Not investment advice.