Tanker Market: A Pessimistic Outlook

Wednesday, May 16, 2012

Drewry Maritime Research’s latest Tanker Forecaster report indicates that Suezmax owners got some respite in the first quarter of the year, but things are looking bleak in the longer term. Spot rates firmed on the back of buoyant demand in the Caribs, Arabian Gulf and West Africa, but rising bunker prices would have absorbed much of the increase. US demand for West African crude was the one to watch as it staged a recovery in March and underpinned Suezmax rates on the benchmark TD5 (West Africa / Caribs - US) route, with earnings surging 64% to $18,733pd. 
But the recent market strength seems a mere aberration rather than a fundamental upward shift. Fundamentals are expected to remain bearish in the near term with the supply-demand gap broadening and a larger number of vessels chasing fewer cargoes.
That lack of confidence was visible in the time charter market, with only two Suezmax vessels fixed during the first quarter. The 12-month rate for five-year old vessels averaged $17,067pd, down about 2.5% from the previous quarter.
Demand is likely to suffer from seasonal weakness in the coming quarter, while the fleet will continue to expand. Drewry expects the Suezmax supply-demand gap to widen from 12.8 million dwt to 14.8 million dwt in the second quarter, while earnings on West Africa-Caribs/USES are expected to average $11,800pd.
With the fleet growing by 7% in 2012 and 2013, market conditions will only start to improve from 2013 onwards, mainly on expected improvement in demand with recovery in the global economy.
 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

Oversupplied Market Eyes Floating Storage Opportunities

Brent oil price reached lows of $27/bbl in mid-January, but has recovered over the past two weeks to above the $30/bbl mark. Nevertheless, volatility is expected

Norway will be Lithuania's 2016 Top Gas Supplier

Lithuania will import more gas from Norway than from former sole supplier Russia in 2016 after developing infrastructure to support liquefied natural gas (LNG) imports,

Crowley Christens 2nd LNG-ready Product Tanker

Crowley christens second of four newly built, LNG-ready product tankers for use in U.S. coastwise trade   Crowley Maritime Corp. has christened the second of

Finance

Limit Exposure with the Uniform Commercial Code

Demanding assurance pursuant to the UCC may save you from sinking on someone else’s ship. Vessel operations require a large network of companies that come together

Baltic Index Touches New Record Low

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying industrial commodities, registered a new all-time low on Monday on muted vessel demand.

Oversupplied Market Eyes Floating Storage Opportunities

Brent oil price reached lows of $27/bbl in mid-January, but has recovered over the past two weeks to above the $30/bbl mark. Nevertheless, volatility is expected

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | 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: 0.0702 sec (14 req/sec)