Drewry Shipping Consultants Ltd’s Post

𝐑𝐞𝐩𝐥𝐚𝐜𝐞𝐦𝐞𝐧𝐭 𝐝𝐞𝐦𝐚𝐧𝐝 𝐛𝐨𝐨𝐦 𝐢𝐧 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 𝐭𝐚𝐧𝐤𝐞𝐫𝐬 Orders for product tankers—including IMO-class coated vessels—are on the rise in 2024 and are forecast to continue into 2025. But with signs of weak long-term demand, what’s driving these new orders in the product tanker market? All thanks to ageing tonnage and the IMO regulation While the supply side looks promising, with many vessels nearing 20 years of service, the demand side shows weak fundamentals in the long run, as gasoline and diesel demand is expected to moderate by the end of the decade. #shipping #tankers #fleet #oilandgas #maritime

‘Compelling’ tanker orderbook augurs well for rates through to 2026 The “compelling” tanker orderbook augurs well for freight rates for the coming couple of years, according to multiple researchers. The tanker sector has one of the lowest extant fleet to orderbook ratios, and a minuscule delivery schedule. According to data from Greece’s Xclusiv Shipbrokers tanker fleet growth will be just 0.02% in 2024, 1.7% next year and 1.8% in 2026. Importantly, too, Arctic notes that the average age of the tanker sector has not been higher since 2003. Another Greek broker, Intermodal, sees the crude tanker fleet capacity growing modestly by 0.6% in 2024 and 1.1% in 2025, with the aframax and suezmax segments leading this expansion. Product tanker fleet capacity is predicted by Intermodal to increase by 1.8% in 2024 and significantly by 4.3% in 2025, with the LR2s and MRs segments being the fastest growing. Regarding the demand and supply dynamics, Intermodal sees the crude tanker market tightening across both 2024 and 2025, attributed to slow fleet growth and increased sailing distances. In contrast, the product tanker market is forecast by Intermodal to experience a tightening in 2024, followed by a weakening in 2025 as fleet growth outpaces demand. #tanker #vessel #aframax #suezmax

Shipping in the Year of the Dragon. Tankers More than healthy earnings are on the cards for tanker owners in 2024. A potential scrapping of much of the dark fleet, belated ordering en masse, and a highly profitable year. That’s the tanker outlook in the Year of the Dragon. McQuilling’s prevailing view for the crude tanker markets favours mid-sized tankers over VLCCs in 2024. Scheduled newbuilding deliveries in 2024 will hit lows not seen for more than 20 years Turning to product tanker earnings McQuilling projects LR2s to earn $56,500 a day in 2024, basis eco tankers without scrubbers, out-earning MRs by 40% excluding Red Sea impacts. Secondhand values for aframax and LR2 tankers have the most upside over the next two years. The tanker vessel class most impacted by the Red Sea diversions is suezmax, likely leading to a spike in earnings. Another chokepoint, the Panama Canal, is expected to keep daily transits to no more than 24 a day, down from a maximum of 40. Analysts at SSY suggest the west coast of the Americas may seek more refined product supply from Asia to meet a shortfall in supply from US Gulf refiners. Analysts at Vortexa issued a recent report showing that tankers operating in opaque markets reached a record high in Q2 last year and have since declined. The latest data from BRS suggests there are a total of 675 tankers in what it terms as the grey fleet, representing 7.4% of the total global tanker fleet. Across the tanker segment, the restraint in ordering is expected to ease this year with owners keen to renew their fleets despite the high newbuild price environment. #shipping #tanker #vessel #suezmax

Dirty-to-clean switch caps high LR2 tanker freight rates as supply widens Expensive LR2 rates force dirty tanker cleanups Clean VLCCs bolstering Middle East gasoil movement Dirty-to-clean conversion unlikely to sustain Robust earnings on clean LR2 products tankers coupled with tonnage tightness

𝐕𝐋𝐂𝐂𝐬 𝐚𝐧𝐝 𝐬𝐮𝐞𝐳𝐦𝐚𝐱𝐞𝐬 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐢𝐧𝐠𝐥𝐲 𝐬𝐡𝐢𝐩𝐩𝐢𝐧𝐠 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐬 Switching tankers to carry clean products rather than crude is an expensive process. However, today’s soaring product tanker rates are seeing more and more VLCC and suezmax owners eye this conversion trade, and not just on maiden voyages. Providing data on both the costs involved and the attainable rates possible, New York broker Poten & Partners has illustrated why more vessels are undergoing conversion therapy. If the entire voyage, including about 30 days for clean-up of a VLCC’s tanks, takes around 90 days, Poten estimates the hire at $4m or $45,000 a day. Adding to that the costs for fuel and chemicals, de-slopping charges, the additional manpower cost, as well as bunkers and lightering costs would bring the total cost of the voyage to $7m, according to Poten estimates. However, the savings on freight are so high today that it is worth it. In today’s market, moving a 90,000 metric ton cargo of diesel on an LR2 from the Arabian Gulf to the UK Continent costs $4.4m, or $49 per ton. This is almost double the cost of the much larger VLCC, which is $7m for 280,000 tons, or $25 a ton, Poten data suggests. This freight arbitrage will likely continue, Poten predicted, until the growing number of cleaned up crude tankers tips the balance back in favour of the dedicated product fleet and/or a pickup in oil movements pulls the crude fleet back in their core trades.

Discover the key cargo handling terminals in ports: Container Terminals: Efficiently manage loading, unloading, and storage of containerised cargo using large gantry cranes and straddle carriers. Bulk Cargo Terminals: Handle large, unpackaged commodities like coal and grain with conveyor belts and grab cranes, minimising cargo loss. Break Bulk Terminals: Safely handle oversized or awkwardly shaped cargo individually, such as machinery and steel beams, using specialised lifting equipment. Ro-Ro Terminals: Enable quick loading and unloading of vehicles and heavy machinery, reducing port stay times with easy access and efficient traffic flow. Liquid Bulk Terminals: Manage import and export of liquid cargoes like crude oil and LNG, adhering to strict safety and environmental regulations with specialised storage facilities. Multi-purpose Terminals: Versatile terminals accommodating containerised, bulk, and break bulk cargoes, offering flexibility to handle various vessel types and cargo. Understanding these terminals is crucial for efficient trade operations. Contact us for expert cargo handling solutions tailored to your needs. 📞 Phone: 020 3633 0886 📧 Email: info@cargoextremehandling.co.uk 🌐 Website: cargoextremehandling.co.uk 🏢 Address: Suite G04 1 Quality Court, Chancery Lane #CargoHandling #PortTerminals #LogisticsEfficiency

Clarksons Securities has come out with a bullish forecasts for VLCC freight rates in 2025. The investment bank predicts rates to reach $90,000 per day, driven by a confluence of positive factors, including rising oil production in the Atlantic Basin, strong refinery margins, and ongoing Middle Eastern unrest, combined with near-zero fleet growth. This reflects our outlook for the VLCC freight market. In an interview with Offshore Energy earlier this year our CEO Charlie Grey commented: "As we enter 2024, the tanker markets have strong fundamentals. Despite being at more muted rates, oil demand continues to grow, and there remains a geographical mismatch between growth in oil demand and growth in supply." Find the full interview with Charlie and further market commentary on the news page of our website: https://lnkd.in/erhfP7dr

Asian shipyards are currently swamped with orders for LNG carriers and containerships, pushing delivery dates as far as 2029. Container giants like CMA CGM are leading the charge with substantial orders, while Chinese yards are also in high demand for mid-sized container vessels. The global shipyard orderbook has spiked by 56 million compensated gross tonnes since late 2020, with LNG and containerships accounting for the majority of this increase. With LNG newbuilding orders more than doubling in the first five months of 2024 compared to last year, the trend shows no signs of slowing down. The tight supply of newly constructed vessels could lead to shortage of capacity in long term, meaning longer lead time and higher freight rates. https://lnkd.in/gGMC4yWY

The increase in tonne-mile demand as #tankers avoid the #Red #Sea is significant, but not as large as from the Russia-Ukraine War, while #investors rediscover the #VLCC. #RivieraMaritimeMedia #tankers #vessel #maritime #marinefuel #emissionsreduction #digitaltransformation #CII #EEXI #SIRE2.0 #multifueltanker #shippingtrade #innovations #sustainability #environmentalperformance #shipfinance #sustainability #zerocarbonshipping #seafarers Asyad Shipping Lloyd's Register BIMCO Filipe Gouveia

Shipowners are now sailing younger and more efficient vessels to save costs on carbon-related emissions. Based on AIS tracking of vessel movements, of all the ships that called European ports in 2023, 1,644 of those vessels have not called at any port in the region in January-July 2024, and none of these vessels are 0-5 years old. Drewry has analysed the increase in fuel cost (bunker cost + cost of emissions) relative to the cost of bunker for a 2017-built Supramax vessel without a scrubber, using VLSFO and operating on the Brazil-ARA route as a case-in-point. A rise of 13% in fuel costs is expected in 2024 relative to the bunker price due to the additional costs of emissions. This will rise to 22% in 2026. - Tanvi sharma, Drewry Shipping Consultants Ltd