Freight rates in the tanker market softened in both dirty and clean segments in May because of seasonal weakness in demand and ample tonnage supply.
Chemical/Oil Products Tanker Sunshine State - Image courtesy: Crowley
Although supply disruptions in Nigeria and labour strikes in France affected chartering activity on related routes, tonnage demand in the Arabian Gulf remained strong as Asian refiners increased their imports of Middle Eastern crude. Supply disruptions in Canada also resulted in increased shipments from the Middle East to the US. However, seasonal weakness in demand from refiners kept the overall tonnage demand weak.
Meanwhile, activity in the newbuilding market remained muted because of tight credit availability and a bearish outlook for the sector, resulting in some softening in newbuilding prices. Sustained weakness in newbuilding activity bodes well for the tanker market in the long term. Moreover, if the recent filing by the STX yard for court receivership results in the liquidation of the troubled yard, it will wipe 17 oil tankers from the orderbook, which will further ease supply pressure.
Source: Drewry Maritime Research