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Saturday, January 20, 2018


Fearnleys Review is a reliable source of reference for information on the tanker market and has a long history. Fearnley’s Review 1999 sees changing in trading patterns for product tankers and says that these are already beginning to have an impact, for example the reduction in the trade from the Middle East to India.

During 1999 several new Indian refineries started to operate and by October last year, the import of products was approximately 0.3 mbd lower than one year earlier.

In 1997, Japan deregulated the products market and opened for exports. The Japanese refineries have, however, not been competitive internationally. The deregulation has, therefore, resulted in nearly 30% increased imports in 1999. Fearnleys anticipate further consolidation and increased imports.

There is a substantial oversupply of products in Asia and more capacity will come on stream in Taiwan, China this year. Several of these refineries are producing high quality products and are targeting the US and S America. Due to reduced imports to India and more capacity on-stream, Fearnleys suggest that the Middle East refiners will market the products further away and they have already seen increased exports to both Europe and the US.

In the short term an interesting situation is about to develop in the US. The current refinery utilisation is approximately 86% of nameplate capacity, whereas the 1999 average was close to 96% (in periods up to 99%). In addition stocks have been reduced significantly. Normally maintenance is done during May, right before the summer holidays and the driving season. In a situation with increased demand and reduced refinery utilisation, the US will have to increase products imports significantly to meet seasonal demand, without depleting stocks to historically low levels.

The conclusion of the above change in trade will be longer distances. Both trade volume and the fleet are expected to increase by 3% this year. The increased distances may, however, increase transportation demand substantially. Tonne miles for products in 1999 was estimated at 2010 bill, 2% above 1999 level, but 2% below 1997 level.