Job Search
  CV Search
Marine geospatial opportunity
Second hand bulkers still more popular than newbuildings
Global shipping looks better next year
Lease accounting: are you up to speed with the new approach?
Product Tankers: The Return of Brazilian Demand

Maritime News

McQuilling Services Projects Lower VLCC Demand Growth in 2018

McQuilling Services is pleased to announce the release of the 2018 Mid-Year Tanker Market Outlook Update.

The Mid-Year Tanker Market Outlook Update provides an outlook on the global tanker market in the context of global economic growth and oil fundamentals influencing tanker demand and vessel supply. The outlook includes a view on future asset values, time charter rates, market freight rates and TCE revenues for 23 major tanker trades and four triangulated routes across eight vessel segments for the second half of 2018 through the remaining four years of the forecast period 2018-2022.

2018 Mid-Year Tanker Market Outlook Update

Global oil demand is expected to grow 1.5% in 2018 to over 99 million b/d with significant gains projected in the middle-light end of the barrel. The longer-term outlook calls for 1.1% gains per annum through 2022 amid strength in jet fuel, LPG and naphtha.

Relatively flat crude supply growth in 2017 is likely to be followed with 1.2 million b/d of growth this year amid a significant expansion North American output. Come next year, additional crude supply in the Middle East is likely to stem from OPEC producers (ex-Iran), pushing global supply growth to 2.0 million b/d in 2019. Global crude oil supply growth is projected to add over 5.3 million b/d through 2022 with added support observed from Russia and Brazil, while Venezuela will remain pressured.

Global crude pricing benchmarks will face pressure next year with Brent expected to fall from an average US $72/bbl this year to US $70/bbl in 2019. On this basis, we expect global HSFO pricing to average US $386/mt this year and fall to US $345/mt the following year considering demand side impacts from upcoming global sulphur regulations (testing, inventory builds). Floating storage for fuel oil is likely to rise going forward, while excess Iranian crude will also likely be stored on floating tankers.

Crude and residuals transport demand is expected to total just over 10.8 trillion ton-miles in 2018, the highest recorded ton-mile demand. On average, mileage transited per ton by DPP tankers in 2017 measured 4,608 and thus far in 2018, we record similar levels (4,601). While mileage remains stable, actual transported volumes is showing a 1.5% rise in 2018 at just below 2.3 billion tons of crude and residual fuel loaded on tankers as crude intake at refineries is projected to reach 82.9 million b/d, up about 1 million b/d year-on-year.

Total VLCC demand in 2017 amounted to about 6.6 trillion ton-miles, up 5.5% from 2016 as the growth of Atlantic Basin exports offset stagnating demand from the Middle East to the Far East. In 2018, we project slightly lower growth of 4.6%, following a 2H resurgence of Middle East crude exports amid a shift in the OPEC compliance accord. The US will continue to add ton-mile demand for VLCCs, particularly if logistical infrastructure improves as crude supply rises. We estimate that US Gulf flows to the Far East will expand by 9.7% per annum through 2022 as the latter’s crude deficit expands by 1.8 million b/d over this period, although short-term pressure will likely stem from recent US-China trade disputes.

The future situation is less certain for Iran with the current US administration’s decision to re-impose sanctions. During the previous Iranian sanctions period, we identified OECD Asia and Europe as the likeliest to reduce or eliminate Iranian imports with up to 955,000 b/d at risk. Historical observations of cross-over between Iran and other Middle East producers is well established with Iraq and Saudi Arabia, projected to absorb Iran’s lost exports, particularly to Europe. Overall, our analysis of these fundamentals shows a 1.0% increase in the Middle East > Southern Europe Suezmax trade in 2018.

LR2 demand is projected to increase in 2018 by 1.1%, despite a relatively strong 3.1% increase in volumes. The average mileage for LR tankers has been steadily declining as the refinery configuration mismatch with product demand in key regions has been mitigated through expanding capacity in the latter. In 2018, the MR2 sector is expected to rise by 4.1% versus year-ago levels as the growth in US Gulf Coast exports to West Coast South America outpaces the declines observed in flows to East Coast South America, although this is projected to stabilize in 2019.

In 2018 and 2019, we project the DPP fleet to grow as a whole by 2.9% and 2.0% on an average inventory basis, when measured by absolute vessel count. For the VLCC sector, we anticipate average inventory growth to slow to an average of just 1.0% in the 2021/22 timeframe, while for the Suezmax and Aframax segments, an average of under 1.5% is projected from 2019-2022. Overall, CPP net fleet growth is projected to average 0.4% over the next two years and only 1.1% over the full five year projection period, although the5.5% annualized growth in the chemical fleet must be considered.

Newbuilding prices in 2018 are projected to increase 4.8% from 2017 levels, in-line with our January projections. Contract values are less sensitive to the prevailing earnings environment despite our call for time charter rates to decline in 2018. In 2019, we project VLCC contract values basis Korea/Japan to average US $90.8 million, while Suezmax orders are forecast to average US $61.3 million. On average, we are projecting a 3.4% increase year-on-year in DPP newbuilding values for 2019.

Freight rates for DPP tankers are projected to remain weak through 2019 due to supply side pressures. We forecast TD3C to average WS 47 in 2019 (2018 flat rate basis), before climbing to WS 54 in 2020 and WS 68 in 2022. On a TCE basis, our projection of bunker prices shows that TD3C will average US $16,100/day in 2019, falling to US $8,600/day in 2020 on the expectation of higher low sulphur bunker prices.

Freight rates for CPP tankers are projected to improve through 2020, with potentially steep upward support envisioned in 2019 amid a favorable net fleet growth situation. We project TC1 and TC5 to average WS 105 and WS 120 in 2019, respectively, with round-trip TCEs coming in at US $12,500/day and US $10,300/day, respectively, while a more favorable scenario is projected using triangulated routes for these tankers, up 28% and 44% for the LR2’s and LR1’s, respectively. For the MRs, the US Gulf >Caribbean trade is expected to average US $470,000 per voyage next year or US $15,700/day. On the benchmark TC2 voyage, our WS rate forecasts shows WS 140 for 2019, peaking at WS 147 in 2020 before trending to WS 146 in the final two years of the forecast.
Source: Mcquilling Services.

Published On August 10th,2018 @ !!11

 Featured Company
Nestle Marine Drilling Ltd,United States International Development Company Manpower Supply,United Arab Emirates Yak Marine Pvt Ltd. ,India
Jude Enterprises & Marine Services Pvt. Ltd.,India Mehdi Bros Ship Services Pvt. Ltd.,India RAS SHIP MANAGEMENT Pvt.Ltd ,India
K.R. Marine Services Pvt. Ltd.,India AL-HUZAIR MARINE SERVICES PVT.LTD,India West Zone Marine Pvt Ltd,India
Admiral Marine Services Pvt. Ltd.,India Udya Shipping Services Pvt. Ltd. ,India CCrescent,India
Nimbus Maritime Services Private Limited,India S K ENGINEERING SHIPPING I PVT LTD,India Vrinda Global Pvt. Ltd.,India
ASP Ship Management (India) Pvt Ltd,India Aark Shipping And Manning Pvt. Ltd.,India Euro Crewing Service LLC,India
BD Shipping,India Global Jobs Pool. ,India CORPORATE MARITIME SER PVT LTD,India
Arctic Offshore & Manning Company Pvt. Ltd.,India Vigil Marine Services Private Limited,India NAAVEX MARINE SERVICES,India
World Ships Management Pvt Ltd,India Sea Wealth Maine Solutions,India Marine Solutionz Ship Management Pvt. Ltd.,India
Trinitas Ship Management Private Limited,India OLIVE CREW MANAGEMENT,India Nams Ship Management Pvt.Ltd,India
IMS SHIP MANAGEMENT Pvt Ltd,India vencen marine solution,India SS Maritime Services,India
Seastrom Marine Pvt. Ltd.,India Malawat Ship Management Pvt.Ltd.,India Mariners Community Ship Management Private Limited,India
Primanav ship management pvt. ltd,India Oceanic Star Shipping Pvt. Ltd. ,India SEASON SHIP MANAGEMENT & MARITIME SERVICES,India
Tapti Waterways Private Limited,India Naz Maritime Services Pvt.Ltd.,India Swar India Shipping Services Pvt. Ltd,India
Quadrant Maritime Pvt Ltd,India Tangar Ship Management Pvt Ltd,India Glance One Ship Management Pvt. Ltd.,India
Oath Marine Services Pvt Ltd,India MARVIN INTERNATIONAL SHIP MANAGEMENT,India Rassiya Shipping Services Pvt Ltd,India
AUBURN SHIPMANAGEMENT DMCC,India Mr.Sushant,India Summai Shipping Pvt.Ltd.,India
Pelorus shipping,India SVS MARINE SERVICES PRIVATE LIMITED,India Seashell Marine Service Pvt. Ltd,India
East India Shipping Agency,India Campbell Shipping Pvt. Ltd.,India Phelix Shipping Ventures Pvt. Ltd,India
I-Marine Infratech (India) Pvt. Ltd,India SHODEN MARITIME & SHIPPING VENTURES PVT LTD,India Coastal Shipping Links(India) Pvt.Ltd,India
DMC SHIP MANAGMENT PVT LTD ,India Unimar Marine Services Pvt. Ltd.,India Three Bees Shipping Pvt. Ltd,India
Ocean Glaxy Marine Pvt. Ltd.,India VR MARITIME SERVICES PVT LTD,India Seaprime Marine Mgmt Pvt.Ltd,India
sarwamangla Marine Pvt Ltd,India Twilight Shipping,India Indocean Maritime Services Pvt Ltd,India
Valaf DMCC,India Lilly Maritime Pvt. Ltd.,India Neptune Ship Management ,India
Nimbusmaritime Service,India MMS Americas LLC,India Amag Ships Pvt. Ltd.,India
gwl maritime services india pvt ltd ,India Blue Whale Maritime,India PRATISHTHA MARINE SERVICES,India
INTER OCEANIC MARINE SERVICES PVT LTD,India Royal Shipping Services,India Join Hands Marine Services Private Limited,India
DEMENTUS SHIP MANAGEMENT INDIA PVT LTD,India Meridian Marine Management Private Limited,India Eklavya Ship Management,India
Penta Crystal Ship Management,India Oceanic Shipping Services Private Limited,India Synergy Maritime Recruitment Services Pvt Ltd,India
MAERSK ,India Oceans Pride Marine Services Pvt. Ltd.,India RAMAN MARITIME ACADEMY PVT. LTD.,India
SeaJobhunt,India APAC Marine Services Pvt. Ltd,India Angel Maritime (India) Services ,India
Albatross  Marine Services  ,India AET Shipmanagement (India) Pvt. Ltd,India Helm Shipping Management Private Limited,India
SHRI MAHAVIR MARINE SERVICES PVT LTD,India Ind-Aust Maritime Pvt. Ltd,India Bridgeview Maritime Pvt.Ltd,India
Calm Seas Shipping and Maritime Services,India Ad Ship Management pvt. Ltd,India Tristarr Maritime And Shipping Private Limited,India

Copyrights © 2012
Terms and Conditions  -   Sitemap  -   Private Policy  -   FAQ  -   Contact Us
Site By : Pheunix