ATLANTIC DEMAND TO CAP DECLINE IN RATES

摘要

Suezmax earnings remained weak in Aprilrnbecause of seasonal weakness in demandrnand persistent tonnage overcapacity in thernmarket. Although tonnage demand in WestrnAfrica grew with increased European importsrnof West African crude, it was insufficient tornpush rates higher. Meanwhile, weak Asianrndemand, particularly Indian demand forrnWest African crude, kept tonnage demandrnon West Africa-India route weak. Thernwidening of Brent-Dubai spread and refineryrnmaintenance in India kept demand for WestrnAfrican crude weak. Indian imports fromrnthe region halved to 260 kbpd in April overrnMarch. As refineries are expected to returnrnfrom maintenance in June, demand on thisrnroute will improve in the coming months.rnConversely, activity in the Black Sea regionrnwill decline further in the coming months asrnincreasing sulphur content in the Urals isrnhurting its demand from European refiners.rnThe quality of Urals has declined in thernrecent months with the diversion of lightrnsweet crude from Western Siberia to China.rnHowever, European refiners are increasingrnimports of US crude to compensate forrnlower imports of the Urals, which bodesrnwell for the Suezmax market. As tonnagerndemand in the Suezmax market is likely tornimprove with increased refinery runs in thernAtlantic, it will keep downside potential ofrnrates limited.