MSI: Tanker Market Earnings on Path to Recovery?

Illustration; Image Courtesy: Tanker Investments

Tanker market earnings in the third quarter of 2017 are encountering difficulties, but peaking fleet growth and increased tonne-miles could see spot rates stabilize and time charter rates improve, Maritime Strategies International said.

The quarter is proving vexatious for owners still struggling with the effects of fleet oversupply, but MSI believes that changing trade patterns could help stabilise the market towards year-end and into 2018.

“With all-OPEC crude exports setting record highs in July, the cartel’s attempts at lowering production are clearly open to question. There was a reduction in flows from OPEC’s Gulf producers while China’s imports tumbled to seven-month lows in July.”

Exports are seeing a divergent trend in the group though, with African volumes of lighter grades on the rise while Middle Eastern medium/heavy crudes have been receding. China’s decline could signal the potential start of a slowdown in imports, yet the July figure was still up by 12% from a year prior and the ongoing downtrend in China’s domestic crude output should continue to lend support to imports, MSI informed.

“Though the remainder of Q3 will be weak, fleet growth has now moved past its peak which should have some stabilising effect as we look to 2018. Despite falling in June, T/C rates are set to see a modest improvement over our forecast,” Sierra Highcloud, MSI Analyst, said.

“However, liquidity is thin and should the upside expected in Q4’s spot market not materialise, the period market could move lower as owners look to protect against spot market downside,” Highcloud added.

Furthermore, other factors have affected the situation. India has been able to buy more US crude after recent upgrades which have allowed refiners to easily switch between running light and heavy crudes. African OPEC volumes of lighter grades have tracked higher while Middle Eastern medium/heavy crudes have been receding.

In Venezuela, where output has already seen a dramatic decline due to political turmoil, any possible oil-related sanctions would invariably have numerous and far-reaching impacts across the tanker market, Highcloud said.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Nov 2017 >>
MTWTFSS
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3

Maritime Information Warfare 2017

Maritime Information Warfare will focus on the growing need for navies to develop their information exploitation capabilities…

read more >

INTERNATIONAL GREEN SHIPPING AND TECHNOLOGY SUMMIT

The Summit will gather key marine experts and companies around the globe which have a big influence in the industry…

read more >

The CWC 18th Annual World LNG Summit & Awards Evening

The CWC World LNG Summit will continue to give you access to premium networking opportunities as it brings together the who’s who…

read more >

Marintec China 2017

The largest maritime event in Asia Pacific, Marintec China connects maritime professionals from the entire shipbuilding supply chain together.

Over the years, Marintec China has grown to reflect the size and importance of the Asian maritime market. 2015 event is another record-breaking edition with the largest exhibition area and the highest number of industry professionals attending ever. The encouraging figures proven that China remains one of the major shipbuilding nations and Marintec China has been the most authoritative platform in Asia.

With the maritime industry facing great opportunities but also many challenges, it is important for the industry to connect and engage more to ultimately win new business in globally-significant markets. A visit to Marintec China is a great way to learn about the latest technology and innovation of the supply industry, a platform for industry professional to meet face to face, make connection and do business.

Marintec China is poised to be the definitive event and is undoubtedly a must-attend for all involved in the maritime industry.

Marintec China will be held from 5 to 8 December 2017 at the Shanghai New International Expo Centre in Shanghai, China and continue its dedication to serve as the “LEADING” platform “CONNECTING” the community and “STRENGTHENING” the maritime industry.

Marintec China offers the perfect opportunity for companies serving the maritime market to showcase their innovations, products and services to a wide audience. A platform for face to face meetings in business, creating new relationships and consolidating existing ones.

More info

read more >