Product Tankship Demand & Overcapacity: An Industry Note

By George Backwell
Wednesday, June 18, 2014
Total Product Tanker Demand (Ton-Miles) 2000-13: Image McQuilling Services

Concern about oversupply only occurs when there are too many ships relative to demand, and in a recent 'Industry Note', McQuilling Services attempts to quantify the situation. A brief excerpt follows:

Much has been said about the product tanker market recently, mainly about tonnage supply.  More industry voices are speaking about their concern of over-ordering and too many ships.  However, the number of vessels on order and planned for delivery is really only half the story.  As long as there is enough demand, any number of ships on order may be acceptable.  Concern about oversupply only occurs when there are too many ships relative to demand.
 
In this note we look at product tanker demand to try to quantify the other half of the story.  As a starting point, it should be noted that there is no readily-available information to be had on tanker demand measured in ton-miles. 

Both historical and projected ton-mile demand data must be synthesized through many steps from basic trade data between countries. Even this data is spotty and somewhat dubious when looking at non-OECD bilateral country trade flows.  Perhaps this is why we don’t see a lot of detailed discussion on tanker ton-mile demand.
 
Our demand development process includes a regional grouping of the world which facilitates our tanker market forecasting methodology.  This grouping identifies 15 different regions where we track the seaborne movement of crude and refined products. 

To be sure, there are a number of assumptions required to do this, but in the end we account for all relevant seaborne trade in this way, across 225 distinct trades.

Conclusions
McQuilling's analysis of clean demand suggests that product tanker demand growth has undergone a dramatic shift downwards since 2010, driven by substantially reduced average trade lengths.  This conclusion is based on global trade data, and so accounts for all demand increases and decreases across 225 trade routes. 

Additional work on both geographic and temporal trade analysis is indicated to determine exactly where the declines have taken place.
 
It would also appear, given the magnitude of the product tanker orderbook that, relative to tanker supply, product tanker demand is not keeping up and the reason may be the negative influence on ton-miles that US Gulf exports seem to represent.

Source: McQuilling Services – Industry Note 14 – "Product Tankers: Truncated Trades Temper Ton-Miles" https://www.mcquilling.com/

Maritime Reporter November 2013 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

MARAD Tests Alternative Power for Ships

The Maritime Administration (MARAD) is testing state-of-the-art, environmentally efficient technology onboard the Training Ship (TS) Kennedy.   The National Defense

Tanker Trends

DNV GL Approvals for SAACKE Scrubbers

Classification increases planning certainty for exhaust gas scrubber operators.   The classification society DNV GL has certified the SAACKE exhaust gas scrubber

China to Import 335 MT of Naphtha, Wants More

China is set to import more than 335,000 tonnes of naphtha and diesel, rare moves for the world's no. 2 oil consumer given it has been self-sufficient at meeting domestic oil product demand,

Total CEO: EU Must Fight US Crude Export Law

First major public appearance of new Total head; he challenges European politicians to fight US ban. The new head of French energy major Total challenged Europe to fight Washington over the U.

Fuels & Lubes

Equinox Class Scrubber Systems Receive Certification

Algoma Central Corporation (“Algoma”), the largest Canadian shipowner and operator of domestic Great Lakes vessels announces that it has received all requisite

Wärtsilä, Diesel United Renew Pact

Wärtsilä and Diesel United Ltd in Japan have signed a ten-year renewal of their co-operation agreement for the sale, manufacturing and servicing of Wärtsilä low-speed marine engines.

MARAD Tests Alternative Power for Ships

The Maritime Administration (MARAD) is testing state-of-the-art, environmentally efficient technology onboard the Training Ship (TS) Kennedy.   The National Defense

Logistics

U.S. Drillers Cut Rigs to Lowest since August

Energy companies have reduced the number of rigs drilling for oil in the United States to the lowest since August, shifting more rigs in favor of natural gas as crude prices dive,

Italy Ending Med Sea Rescues

Rights groups warn of risk of more deaths; EU mission Triton will have more limited scope. Italy said on Friday it would close a sea rescue mission that has saved the lives of more than 100,

St. Lawrence Seaway Workers Extend Strike Deadline

The union that represents workers on the St. Lawrence Seaway, the waterway that links the Great Lakes and the Atlantic Ocean, has extended a strike deadline to Monday at 5 p.

Consulting

SMC to Provide Marine Coordination for Siemens

Specialist Marine Consultants Ltd (SMC) have been working with Siemens, providing offshore marine coordination for a fifth Siemens Wind Power construction project.

Good Performance by Dun & Bradstreet in 3Q 2014

Dun & Bradstreet, the world's leading source of commercial information and insight on businesses, today reported results for the third quarter ended September 30, 2014.

Schlumberger Introduces New Well Integrity Service

Schlumberger announced today the release of Invizion Evaluation* well integrity service, which helps operators evaluate zonal isolation by using integrated drilling, cementing and well logging data.

 
 
Maritime Careers / Shipboard Positions Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1333 sec (8 req/sec)