RAPID SWINGS IN TANKER MARKET
The tanker market is, by its nature, very volitile, as events around the globe have a major impact. Concordia Maritime CEO Kim Ullman points out in his latest market update, how among other things, the Coronavirus has recently affected the market.
In December, the VLCC rates were USD 100,000 per day, in early February at USD 40,000 and on February 10 the level was USD 15–20,000 per day. For product tankers, development is basically the same, but at lower levels.
“The decline is largely a direct consequence of the Coronavirus,” says Kim Ullman. “The spread of the virus has resulted in sharply reduced flows of goods and people, which in turn affects the demand for both oil and tanker transports.”
Freight levels have also been affected by the unusually warm winter in northern Europe. The decline in the VLCC segment is also partly due to the United States having lifted its previous sanctions against the Chinese shipping company Cosco Dalian’s tankers. Since these vessels make up just over three percent of the global VLCC fleet, this means that the supply side is now increasing somewhat.
“These are clear examples of how unpredictable events can quickly change conditions,” says Kim Ullman. “We’re now hoping that the spread of the Coronavirus will be suppressed. With the exception of the virus, we see good demand for oil and record low net growth in the global fleet. This provides good incentives for stable demand for transports.”
Concordia continuously updates its shareholders on market developments at the company’s website.
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