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Tanker market faces pressures, but prospects are brightening |
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Saturday, 13 February 2010 |
 While tanker rates experience newly found pressures, a number of factors are coming into play, brightening prospects for tanker owners. One of those is the continued trend observed during 2009, with increased port delays. As a result, tanker tonnage keeps being held up, limiting supply. In fact some analysts think that port delays are the main reasons, why the market didn’t collapse in the previous weeks.
According to a recent report by maritime consultants McQuilling
Services, port congestion and delays in 2009 continued to detract from
available tanker supply, following similar trends seen in 2008. Various
social and environmental factors around the globe, as well as limited
infrastructure improvements seen in ports, have alleviated at least some
portion of the bulging supply of tankers on today’s high seas.
Predictions for 2009 called for continued civil unrest in areas such as
West Africa, as well as forecasts for a turbulent hurricane season in
the US Gulf. While these proved to be somewhat erroneous, tanker owners
still found vessels spending more time in port than they had in the
past.
“Delays in port have the effect of extending voyage durations,
conceptually equivalent to slowing ships down. For instance, in 2009
VLCC’s spent about 3 days more in port per voyage (two port calls) than
they had in 2007, effectively reducing 24 ships from the trade” said the
US-based consultant. This trend has effectively been continued through
to 2010, which has resulted in limiting supply in a crucial time, when
too many ships were hunting too few cargoes.
This balance though could soon be shifted, as both OPEC and most
recently IEA revised their predictions for oil demand upwards. At the
same time, the ever so important factor for the tanker market of the
recovery of the world economy, seems to be back on track, despite
Friday’s dismal news on the stagnant growth of the eurozone economy. In
its latest fourth quarter results report, Nordic American Tanker
Shipping said that presently there are some bright spots on the horizon
for the world economy. “The decrease in exports of oil from OPEC to the
West seems to have bottomed out. We consider this to be good news for
the tanker markets. The recession is reducing the demand for
transportation capacity internationally. The demand side for tankers to
some extent continues to be impacted positively by the use of tankers
for storage.
On the supply side, we now see clearly that the current financial
situation for many shipping companies has led to delayed deliveries of
newbuildings and to cancellation of newbuilding orders” NAT concluded.
Similarly according to Mcquilling, port delays are expected to spill
over to 2010 as well, as a result of factors like weather conditions,
the EU’s severe lack of storage facilities, port dredging and the
prevalence of French Union strikes. But apart from these, other reasons
as well will cause more port delays, like for instance the increases in
global oil demand forecasted by OPEC, US EIA, and the IEA predict demand
to average 86.3M bpd this year –more than a 1M bpd increase from 2009.
Meanwhile, nearly 140 tankers employed in floating storage, many of
which may potentially join in the traffic awaiting port operations.
Also, China’s crude oil stockpiling program goes into stage- two as
additional tanks come on-line. Yet enhancements to port infrastructure
to meet steadily increasing imports seems lacking at present. At the
same time, the ability of West African nations to stabilize their
national, governmental, and port infrastructure to facilitate the free
flow of goods. The “indefinite” ceasefire issued by MEND last summer has
been revoked, and attacks against oil majors in the Niger delta have
already begun again.
Concluding, McQuilling noted that “there is little that can be done to
combat port delays by the participants of the tanker markets alone.
Weather-related delays will continue to stall trade beyond control and
predictability as is any act of nature. Furthermore, improvements to
port infrastructure appear at the moment the Achilles heel of market
growth, particularly evident in those nations hard hit by recession.
Until accommodations for expanding trade are realized, port delays will
continue to be the poisoned arrow in the heel of tanker turnaround
time”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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