Tanker market better than expected
200 000 DWT
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BALTIC TANKER INDICIES 3M. AVERAGES
END OF MONTH
INDEX POINTS 3500
F.EAST
ID: 1554
3000
DIRTY
2500 OTHER AREAS
2000
1905
1500 1000 AMERICA ATLANTIC
CLEAN
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2010
©Fearneleys
far the largest market in the world could be almost 9% lower in 2010 than three years before. OECD Europe might face a decrease of 1.0% in 2010 to 14.36 mbd, after a decrease of 5.3% last year and virtually no change in 2008 – leading to a level that is about 6% lower than three years ago. Japan and Korea combined are estimated to see a decrease of 1.2% this year to 6.50 mbd, after decreases of 5.3% in 2009 and 4.5% in 2008 – leading to a level that is about 11% lower than three years before. It appears that the estimated oil consumption of 45.4 mbd in the OECD countries in 2010 will be 7.6% lower than three years before, whereas non-OECD countries’ consumption will, at 40.9 mbd, be 10.1% higher than three years before. A closer look at the forecasts for 2010 shows that China’s oil consumption will increase by 7.6% to 9.16 mbd, whereas India will see modest growth of around 2% to 3.33 mbd. It is interesting to observe that Middle East oil
consumption is estimated to increase by 4.2% to 7.35 mbd, which is up almost 13% over three years. Such strong demand growth in combination with OPEC’s minimalist approach, restricting oil production in order to defend the oil price, gives more room for other oil producers that are often closer to main market areas. This development clearly has a negative impact on tonnage demand. Looking ahead, the substantial overhang of tonnage to be delivered will – despite further delays in newbuilding deliveries and some cancellations of late deliveries – be hard to balance by tonnage demand growth, and the tonnage balance seems bound to deteriorate over the next couple of years. As can be expected during times of shrinking oil consumption, product carriers have experienced poorer demand developments than crude carriers. This has also coincided with a very strong product carrier fleet growth. As much as 30% of the existing 40-55,000
dwt tonnage has been delivered since the start of 2008. On 19 May, the VLCC spot rate from ME Gulf to Japan stood at USD 30,000 per day, with Imarex future quotations at about USD 22,000 for calendar year 2011 and USD 22,500 for calendar year 2012. The spot Suezmax rate for West Africa to the US Atlantic was noted at USD 54,500, with about USD 20,000 quoted for 2011 and USD 22,000 for 2012. In comparison, reported time charter rates were significantly higher – for VLCCs at USD 44,000 for one year and USD 40,000 for three years, and for Suezmax at USD 30,000 for one year and USD 27,000 for three years. Should they materialise, such healthy rate levels way above operating costs would not induce much scrapping. There will most likely be significant market volatility in the next couple of years too, with some waves of scrapping in between.
DNV tanker update NO. 1 2010 |
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