VLCC rates of USD60,000/day triggered a deeper dive in crude tankers, so we looked into ~66,000 fixtures. We looked through ~66,000 tanker fixtures… With increased interest in the crude tanker segment coupled with spot rates approaching USD60,000/day, we decided to dig deeper into alternative data sources, as we currently rely on delete aggregated data (we mostly use BP data). We then bought 10 years of fixture history (some 66,000 fixtures) from Clarkson. Each of these fixtures has a loading port, discharge port, cargo size and lay/can. We then calculated the implied (laden) tonne-mile demand.
....and discovered VLCC average sailing distances are up 9% since 2010. Our current crude tanker demand balance indicated positive volume growth, but negative tonmile demand growth. However, the alternative fixture data set from Clarkson suggests that average VLCC sailing distances are up 9% since 2010, and up 15% since 2003, while suexmax average distances are up 8% since 2003.
….and crude tanker demand growth of 14%? The Clarkson fixture data findings suggest crude tanker demand growth of 14% annually over 2010–2013. The first questions are obvious: is there something wrong with our new set of data, and can this be true?
14% crude tanker demand growth becomes 4%? The main drawback in the data from Clarkson is that it does not include all trades in crude, simply because not all cargo exported is reported. To estimate the exact amount not reported in the Clarkson data is difficult. To mitigate the fact that the Clarkson fixtures will miss out on a substantial part of the total trade of crude, we use our previous demand estimates up to 2004 and then apply the ton-mile change in the Clarkson data from there. The result of doing this is obviously smaller percentage changes in the Clarkson data (for instance, the Clarkson data on a stand-alone basis indicates ~15% YOY growth in ton-mile demand in 2013, while when adjusting, this 15% becomes ~4%), but still above our current negative tonmile demand forecast of -2%.
Crude tanker utilisation becomes 92%, as opposed to 76% in 2013? We then used our current fundamental model with the alternative demand-side to investigate the consequences. On our current forecasts, the crude tanker space looks to be facing severe difficulties, as we estimate utilisation of 76% in 2013, falling to 71% in 2015e.
Applying the alternative demand figures from Clarkson, however, suggests fleet utilisation of 92% in 2013. On the alternative utilisation we note that 2013e is the first year in six years in which conventional utilisation improves, which was the trigger point in our dry bulk fundamental model to allow for the rate improvements this autumn.
VLCC rates of USD40K/day and not USD19K/day?
The major consequence of the alternative crude tanker demand is obviously a more optimistic view on the crude tanker space, with potential VLCC spot rates above USD40,000/day in 2014e and 2015e, above our current USD19,000/day forecast for 2014.
With increased interest in the crude tanker segment coupled with spot rates approaching USD60,000/day, we decided to dig deeper into alternative data sources, as we currently rely on aggregated data (we mostly use BP data). We then bought 10 years of fixture history (roughly 66,000 fixtures) from Clarkson. Each of these fixtures has a loading port, discharge
port, vessel name and details, cargo size and laycan. We then calculated the implied (laden)
tonne-mile demand for all these fixtures sourced by Clarkson.
Our current crude tanker demand balance concluded on positive volume growth, but negative ton-mile demand growth. However, the alternative data set using fixture data from Clarkson
suggests that the average VLCC average sailing distance is up 9% since 2010, and up 15%
since 2003, while the suexmax average sailing distance has fallen 3% since 2010 but is up
8% since 2003.
14% crude tanker demand growth becomes 4%
Below we use our current fundamental model with the alternative demand-side to investigate
the consequences when using our alternative crude tanker demand data.
The main drawback in the data from Clarkson is that it does not include all trades in crude,
simply because not all cargo exported is reported. To estimate the exact amount not reported
in the Clarkson data is difficult, and we have not done that yet.
To mitigate the fact that the Clarkson fixtures will miss out on a substantial part of the total
trade of crude, we use our previous demand estimates up to 2004 and then apply the ton-mile
change in the Clarkson data from there. The result of doing this is obviously smaller
percentage changes in the Clarkson data (for instance, the Clarkson data on a stand-alone
basis indicates ~15% YOY growth in ton-mile demand in 2013, while when adjusting, this
15% becomes ~4%), but still above our current negative ton-mile demand forecast of -2%.
…and crude tanker utilisation of 92%, as opposed to 76%...
Below we use our current fundamental model with the alternative demand side to investigate the consequences. On our current estimates, the crude tanker space looks to be facing severe
difficulties, as we estimate utilisation of 76% in 2013, falling to 71% in 2015e. Applying the
alternative demand figures from Clarkson, however, suggests fleet utilisation of 92% in 2013.
On the alternative utilisation we note that 2013e is the first year in six years in which conventional utilisation improves, which was the trigger point in our dry bulk fundamental model to allow for rate improvements, which we have seen over the past 3–6 months.
with VLCC rates of USD40K/day and not USD19K/day?
The major consequence is obviously a more optimistic view on the crude tanker space, on the
basis of VLCC rates above USD40,000/day in 2014e and 2015e. We assume 3.4% average
annual demand growth, the same as that in 2010–2013. In our scenario we use the same
relationship as in our current analysis for new orders and scrapping; i.e. with higher rates our
model indicates more ordering and less scrapping. For a full walk-through of our model
approach, please see our sector report “Surprise, it is still all about speed” published on 28
August.
To read the full report, please click here
....and discovered VLCC average sailing distances are up 9% since 2010. Our current crude tanker demand balance indicated positive volume growth, but negative tonmile demand growth. However, the alternative fixture data set from Clarkson suggests that average VLCC sailing distances are up 9% since 2010, and up 15% since 2003, while suexmax average distances are up 8% since 2003.
….and crude tanker demand growth of 14%? The Clarkson fixture data findings suggest crude tanker demand growth of 14% annually over 2010–2013. The first questions are obvious: is there something wrong with our new set of data, and can this be true?
14% crude tanker demand growth becomes 4%? The main drawback in the data from Clarkson is that it does not include all trades in crude, simply because not all cargo exported is reported. To estimate the exact amount not reported in the Clarkson data is difficult. To mitigate the fact that the Clarkson fixtures will miss out on a substantial part of the total trade of crude, we use our previous demand estimates up to 2004 and then apply the ton-mile change in the Clarkson data from there. The result of doing this is obviously smaller percentage changes in the Clarkson data (for instance, the Clarkson data on a stand-alone basis indicates ~15% YOY growth in ton-mile demand in 2013, while when adjusting, this 15% becomes ~4%), but still above our current negative tonmile demand forecast of -2%.
Crude tanker utilisation becomes 92%, as opposed to 76% in 2013? We then used our current fundamental model with the alternative demand-side to investigate the consequences. On our current forecasts, the crude tanker space looks to be facing severe difficulties, as we estimate utilisation of 76% in 2013, falling to 71% in 2015e.
Applying the alternative demand figures from Clarkson, however, suggests fleet utilisation of 92% in 2013. On the alternative utilisation we note that 2013e is the first year in six years in which conventional utilisation improves, which was the trigger point in our dry bulk fundamental model to allow for the rate improvements this autumn.
VLCC rates of USD40K/day and not USD19K/day?
The major consequence of the alternative crude tanker demand is obviously a more optimistic view on the crude tanker space, with potential VLCC spot rates above USD40,000/day in 2014e and 2015e, above our current USD19,000/day forecast for 2014.
With increased interest in the crude tanker segment coupled with spot rates approaching USD60,000/day, we decided to dig deeper into alternative data sources, as we currently rely on aggregated data (we mostly use BP data). We then bought 10 years of fixture history (roughly 66,000 fixtures) from Clarkson. Each of these fixtures has a loading port, discharge
port, vessel name and details, cargo size and laycan. We then calculated the implied (laden)
tonne-mile demand for all these fixtures sourced by Clarkson.
Our current crude tanker demand balance concluded on positive volume growth, but negative ton-mile demand growth. However, the alternative data set using fixture data from Clarkson
suggests that the average VLCC average sailing distance is up 9% since 2010, and up 15%
since 2003, while the suexmax average sailing distance has fallen 3% since 2010 but is up
8% since 2003.
14% crude tanker demand growth becomes 4%
Below we use our current fundamental model with the alternative demand-side to investigate
the consequences when using our alternative crude tanker demand data.
The main drawback in the data from Clarkson is that it does not include all trades in crude,
simply because not all cargo exported is reported. To estimate the exact amount not reported
in the Clarkson data is difficult, and we have not done that yet.
To mitigate the fact that the Clarkson fixtures will miss out on a substantial part of the total
trade of crude, we use our previous demand estimates up to 2004 and then apply the ton-mile
change in the Clarkson data from there. The result of doing this is obviously smaller
percentage changes in the Clarkson data (for instance, the Clarkson data on a stand-alone
basis indicates ~15% YOY growth in ton-mile demand in 2013, while when adjusting, this
15% becomes ~4%), but still above our current negative ton-mile demand forecast of -2%.
…and crude tanker utilisation of 92%, as opposed to 76%...
Below we use our current fundamental model with the alternative demand side to investigate the consequences. On our current estimates, the crude tanker space looks to be facing severe
difficulties, as we estimate utilisation of 76% in 2013, falling to 71% in 2015e. Applying the
alternative demand figures from Clarkson, however, suggests fleet utilisation of 92% in 2013.
On the alternative utilisation we note that 2013e is the first year in six years in which conventional utilisation improves, which was the trigger point in our dry bulk fundamental model to allow for rate improvements, which we have seen over the past 3–6 months.
with VLCC rates of USD40K/day and not USD19K/day?
The major consequence is obviously a more optimistic view on the crude tanker space, on the
basis of VLCC rates above USD40,000/day in 2014e and 2015e. We assume 3.4% average
annual demand growth, the same as that in 2010–2013. In our scenario we use the same
relationship as in our current analysis for new orders and scrapping; i.e. with higher rates our
model indicates more ordering and less scrapping. For a full walk-through of our model
approach, please see our sector report “Surprise, it is still all about speed” published on 28
August.
To read the full report, please click here
