- VesselsValue has issued a new report after positive autumn and winter.
- It analyses factors such as the lifting of US sanction, increased crude tanker supply, the impact of the Coronavirus and increased fleet strength are analyzed.
- In April 2019 there were 741 live vessels, and currently, there are 785 units representing a 6% supply increase.
- US sanctions have been lifted, bringing over 40 units back into the general market.
- Reducing the available supply ultimately causing rates to peak at a 10 year high.
According to an article published in Ship Insight and authored by Malcolm Latarche, VesselsValue has issued a report with contributing to supply growth and demand constriction for tanker rates.
Factors that affected tanker rates in 2019
- The US sanctions on a number of Chinese tanker owners.
- The opaque ownership structures of the fleets, charterers stayed well clear of any vessel possibly related.
- Reducing the available supply ultimately causing rates to peak at a 10 year high.
- Terrorist activity in the gulf, and a number of other vessels going out of service to have regulatory equipment installed e.g. exhaust gas scrubbers.
Market analysis 2020
The tanker market has been looking healthy with owners enjoying the increased rates throughout autumn and winter.
- US sanctions have been lifted, bringing over 40 units back into the general market.
- It has effectively increased crude tanker supply adding downward pressure onto the market.
- There have been a number of additional downward pressures; Chinese New Year and now Coronavirus.
- The full impact of the Coronavirus may not have been felt yet so prolonged continuation could present a risk to Chinese oil demand, port calls and hence the tanker market.
- The percentage increase in supply for VLCCs has outstripped the percentage change of demand.
- In April 2019 there were 741 live vessels, and currently, there are 785 units representing a 6% supply increase.
Conclusion
A combination of the above-mentioned factors poses an early warning for the tanker markets and there are still issues that warrant attention such as oversupply, demolition price, tonnage, and fleet strength.
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Source: ShipInsight
