Using VesselsValue’s trade tool, VesselsValue’s head trade analyst Charlotte Cook assesses the current status of the product tanker market, using historical and current AIS-derived supply and demand data
The clean tankers market is by no means out of the woods as Covid unpredictability remains, however, global demand data coupled with earnings data shows a slightly more positive picture for the clean market in recent months. MR rates increased rapidly in early May this year, reaching US$20,000 per day. This was still 30% lower than rates in May 2020, but 400% higher than earnings at the end of April this year.
Product tanker cargo miles reassuringly remained high in April, only falling by 0.5% compared with March. We are also seeing clean tanker exports out of China increase steadily since January 2021, as Chinese refining ramps up.
Clean tanker laden speeds have been increasing month-on-month since the start of the year, growing by 3% between December 2020 and May 2021. Despite air travel still widely being at a standstill, lockdowns beginning to ease once again has meant the consumption of liquid fuels such as petroleum and diesel is increasing. Cargo mile demand into northwest Europe is a good example, remaining relatively stable since the end of last year when vaccination programmes started. As vessel demand shows these signs of recovery, vessels are beginning to move faster, now surpassing speeds seen at the end of 2019, which is another indicator that vessel bookings are increasing.
Clean tanker speeds are increasing and cargo mile demand is rising in line with recent evidence of more promising rates. If the clean tanker market continues in this direction and we see widespread vaccination success, we could see a more substantial clean tanker recovery in Q3 2021.
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