Last week, I attended the annual Intertanko Tanker Event in Singapore, and the sights and sounds were completely different to those at last year’s event in Rome. The sight of the litter-strewn monuments of Rome were replaced by pristine, almost fussy, roadside gardens and, of course, the multitude of tankers in the bay. One office I visited had a view of perhaps a hundred ships at anchor.
However, the local and re-located tanker professionals were quick to tell me that looks can be deceiving, and that the Singaporean sea space was actually quite small. One told me that he used the type and density of tankers swinging at anchor as a “gut feeling” indicator of the state of the market.
(Incidentally, if I were a tanker professional in Singapore, I would formalise this ad hoc indicator into an index –Singapore Tanker Idle Log (STIL) – based on the number of tanker types at anchor each day versus the long-term average. One would have to allow for the growth of the fleets in most tanker sectors, and look into length of stay and other factors, but it would be interesting to see how accurate the correlations are.)
In my opinion, the sound of Singapore is surprisingly hushed considering there are more than 5M people packed on an island. I expected that number of people and cars would produce a constant 24 hour din of horns and internal combustion engines (ICE). But Singapore is full of hybrid and electric vehicles gliding quietly through the streets.
Electric vehicles (EV) were a subject of debate at the Intertanko Tanker Event in Singapore, with owners and operators trying to gauge how many more generations of tankers were left for investment before the critical mass of EVs reduces tanker demand. The debate could have been called: 'Have we reached peak tanker?' My takeaway was that we have another 15 years of the current generation of tankers before the demise of the ICE and the takeover of EVs leads to a reduction in tanker demand.
But would demand really drop so drastically? One seasoned China watcher noted that the burst of EV activity in China is being curtailed by the practicalities of living with an EV. The Chinese Government has been pushing its citizens toward EVs to reduce the pollution from ICE vehicles, but for those living in city tower blocks, there are not enough charging points in the parking zones. Our China watcher has noticed a sharp rise in the use of electric bicycles (e-bikes). The e-bike battery can be removed and charged in the apartment, and an e-bike nips through the traffic jams unavoidable to four-wheeled EVs.
Fortunately for the tanker business, e-bikes and EVs still require plastics, and one outcome of the debate was the consideration that a larger proportion of refinery output would be targeted at the petchems required for plastic production. This would lead to an increase in oil products traffic in the long term, at the expense of crude oil tankers.
In the end, one only has to glance out of the window in Singapore and have a look and a listen to get a fairly good idea of the changes that are in store for the tanker market.