BIMCO’s latest report: tepid growth in 2019 with higher expectations from the IMO marine fuel sulphur cap in 2020
Denmark-based shipowners’ organisation BIMCO has posted its report on the tanker market between January and April 2019.
Written by chief shipping analyst Peter Sand, the report notes that the crude oil tanker fleet grew by 3% between January and the end of April, with 13.2M dwt of new tonnage, offset by 1M dwt of removals, mainly sales for recycling.
The crude oil shipping sector saw an influx of 25 VLCCs, 21 Suezmax and 15 Aframax, but 16 of the Suezmax newbuildings are operating in the product tanker trade, a trait of the current tanker market.
BIMCO regards the current over-supply situation in the crude oil tanker sector as the main reason for the stall in crude oil tanker contracting, with only 4.7M dwt of orders placed in the first four months of 2019.
Demand for crude oil tankers, especially VLCCs could increase significantly if the US includes South Korea into the Iranian sanction regime, as that would increase tonne-mile demand significantly.
According to BIMCO, a VLCC takes 22 days to sail from Kharg Island in Iran to Busan in South Korea, while a ban on Iranian crude oil could see South Korea switch to crude oil from the US Gulf, a 54-day, 15,000 nautical mile voyage and a huge absorber of VLCC tonnage.
On the product tanker side, the fleet is growing rapidly with BIMCO reporting a 10-year high of 3.4M dwt of tonnage delivered in January to April 2019, made up of 14 LR2 and 27 MRs.
BIMCO feels that the product tanker trade in H2 2019 will be driven by IMO 2020 and fuel distribution.
BIMCO tanker market statistics:
Fleet sizes (change since 1 January 2019)
Rate indices (change since 12 February 2019)
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