Rates in the tanker market remained weak in March because ofrnseasonal weakness in demand. Crude tanker rates are particularlyrnlow, and owners are not even able to recover the operating costrnof ships. Although tonnage supply in the crude tanker marketrnhas started to shrink owing to a surge in demolitions, seasonalrnweakness in demand is preventing an increase in rates. Thernongoing seasonal refinery maintenance, especially in Europernand Asia, is keeping tonnage demand weak. Even though ratesrnare likely to remain depressed in the short term, rising scrappingrnactivity bodes well for the supply-demand balance in the cruderntanker market. Crude tanker demolitions in first-quarter 2018 werernalready equivalent to 75% of total scrapping activity in 2017. Thernaverage age of demolitions has dipped below 20 years, whichrnreflects the dire situation in the freight market and attractive scraprnprices. Although the situation in the product tanker market isrnslightly better, MR rates in the Atlantic market are likely to remainrnsoft until the summer driving season starts underpinning demand.rnSimilarly, refinery maintenance in the Middle East will keep LRrnrates weak in the coming months.
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