Tanker Super Cycle?
For tankers, it feels like every other shipping sector has experienced some form of super cycle over the past 12-18 months. Whilst tanker owners witnessed record low earnings, rates in the container and LNG sectors soared to record highs. Even dry cargo rates touched multidecade highs. Such volatile container, dry and LNG rates were largely unpredicted. Record container rates were partly caused by changing consumer trends, rebounding demand and port congestion; LNG benefitted from the energy crisis, low stocks, reduced pipeline flows and huge arbitrage between West and East, all of which made the cost of freight temporarily irrelevant, whilst diversions also created inefficiencies. Dry owners benefitted from resurgent demand and geopolitical alterations to trade flows, whilst the energy crisis boosted coal demand. Port congestion also featured. Tanker owners, however, continued to suffer from global mobility restrictions, which although impacting the market to a lesser extent in 2021 than in 2020, still prevented oil demand from exceeding pre-pandemic levels. Indeed, the oil market's reliance on transportation fuel demand was its Achilles heel compared to other commodities.
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