Gibson sees products demand ‘rebound’
Researchers say beyond immediate disappointment market could find some support.
June 20th, 2016 10:06 GMT
by Andy Pierce
Published in Tankers
Products tanker rates have undershot expectations in 2016 but researchers at Gibson Shipbrokers believe a demand rebound could offer owners a helping hand.
Gibson counts 44 new medium range (MR) tankers, 25 LR2s and eight LR1s arriving this year at a time when demand has been less supportive than many believed.
A lack of arbitrage business in the west, high diesel stocks in Europe and premium naphta prices in the east have all dented the market, the shipbroker said in its latest tanker report.
“However, beyond the immediate horizon, a demand rebound may be on the cards,” Gibson’s researchers wrote.
“Demand for naphtha in the East is expected to increase over the second half of 2016 as new petrochemical projects ramp up.
“Much of this additional demand will be met from new condensate splitter capacity in the Middle East as well as increased arbitrage flows from Europe.”
At the same time, trading opportunities are expected to increase as the crude market rebalances and product stocks ease, Gibson explains.
“Longer term, a period of weaker refining margins could once again see capacity rationalisation in aging refining centres, increasing the need for long haul imports and with that, increased tanker demand,” the report said.,
“Right now, optimists may even take comfort from meteorologists’ predictions that the 2016 hurricane season may be the most active in years, perhaps injecting some volatility into the freight market.”
http://www.tradewindsnews.com/tankers/764963/gibson-sees-products-demand-rebound
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