Finally, carriers add more loops, cancel fewer sailings
Are carrier services getting more predictable? In a volatile, under-supplied market, it is a nice feeling when you perceive that things start to look better.
Based on Drewry data, we are reaching this stage: carriers are adding new services or reinstating old ones, significantly expanding the supply for the peak season. More competition is increasing the range of available shipping options. Meanwhile, established carriers are working to restore some of their disrupted schedules.
Key numbers: Ocean carriers will add 10 transpacific loops and 4 Asia-North Europe services between May and July.
Having previously shrunk after the end of the pandemic boom, the number of carrier competitors is set to increase again: Ellerman will re-enter the Asia-Europe route and SeaLead and BAL Container Line the transpacific
Crude oil exports from Türkiye down this year
Crude oil exports from Türkiye have maintained their downward trend during the first five months of 2024, established since the start of 2023. In its latest weekly report, shipbroker said that “2023 has been another positive period for crude oil trade, despite the high oil prices and risks of economic recession. In Jan-Dec 2023, global crude oil loadings went up +4.7 percent y-o-y to 2186.8 mln tonnes, excluding all cabotage trade, according to vessels tracking data from Refinitiv. The positive trend continued in Jan-May 2024, when global loadings increased by +1.2 percent y-o-y to 930.8 mln t, from 919.8 mln t in the same period of 2023. Exports from the Arabian Gulf were down by -1.0 percent y-o-y to 366.3 mln t in Jan-May 2024, and accounted for 39.4 percent of global seaborne trade. Exports from Russian ports (including Kazakh crude) also declined by -1.1 percent y-o-y to 95.4 mln tonnes, or 10.3 percent of global trade. From the USA, exports increased by +2.7 percent y-o-y to 87.0 mln tonnes in Jan-May 2024. From South America, exports surged by +13.6 percent y-o-y to 72.9 mln t. From ASEAN exports surged by +24.6 percent y-o-y to 56.9 mln t”.
Tanker rates could remain elevated even after 2030
The tanker market is expected to remain quite healthy and profitable not only in the short to medium term, but also in the long term as well, even after 2030. In its latest weekly report, shipbroker said that “based on the June’s IEA market report, the oil market is precariously balanced on a tightrope. On one side, the global oil supply is surging (rising by 520 kb/d in May to 102.5 mb/d), fuelled by a rise in non-OPEC+ production (plus 1.4 mb/d) that countered OPEC+ reduction (minus 880 kb/d). Brazil’s seasonal ethanol output bump further adds to the growing supply. On the other hand, oil demand growth is taking a nosedive (now at 960 kb/d, 100 kb/d below last month’s forecast). This slowdown, particularly evident in developed economies and a sluggish China, has led to a significant downward revision of 2024 demand forecasts.
Dirty crude oil flows to China
Present statistics underscore the declining trend in VLCC ballast speeds during the summer season, coinciding with a weakening trend in AG-China freight market rates throughout June. Since mid-May, there has been a noticeable strategy among industry players to reduce ballast speeds in the Arabian Gulf, possibly in response to market conditions.
As the summer season unfolds, a subdued sentiment grips the freight market, particularly evident in the VLCC MEG-China route. The number of vessels at Ras Tanura has increased approaching the end of June, yet the growth in dirty tonne days shows no signs of strengthening. Against the backdrop of a declining freight market, VLCC ballast speeds in the Arabian Gulf have decreased, indicating a cautious approach among operators. Looking ahead to the month’s end, market projections suggest a continuation of this trend, with supply dynamics playing a pivotal role in shaping crude oil freight rates.
Newbuilding orders keep piling up
Newbuilding ordering activity remained elevated over the course of the past week. In its latest weekly report, shipbroker said that “newbuilding business focus of the week is the activity in the tanker market which keeps on piling up. The orderbook for all type of ships is reaching a highest compared to the last decade and sensibly higher than the minimum registered during late 2020. Tanker contributes to be the main driver of growth in the global order book, both for the very healthy market combined with the high price of very modern tonnage which makes the NBs a more “attractive” investment. Starting from crude market and large tonnage, Chandris have firmed a single slot for VLCC at Hanwha (ex DMSE) for a price around $ 130m scrubber fitted. Dalian KHI in China got an order for two VLCC for undisclosed account which could be either local chinese Owner or a speculative order with an aim to resell at a profit closer to the delivery. Price is not reported, deliveries end 2027 and early 2028. Major trader Trafigura is rumoured to have added more VLCC to their orberbook at New Hantong, to a total of five units. In the product tanker segment, price for MR2 have reached a historical high; middle eastern based Onex selected Hyundai in Vietnam for delivery in 2026 and 2027 for two x 50,000 dwt at a price of mid $ 53m. Mercuria added LR1 at his orderbook at Yangzijiang two units for a total price of about $ 112m.”