The increase was down to the reduction in oil prices and improving refining economics, which have stimulated demand, McQuilling Services said in its mid-year roundup.
Clean tanker tonne/miles are forecast to rise by 6.6%, as lower gasoline prices stimulate consumption among drivers, while global arbitrage plays create a dynamic trading environment for products.
A slight expansion of 0.8% in VLCC demand is anticipated this year, as the benchmark Middle East to Far East trade expands by 6.6% offsetting a decline of 25% in Middle East tanker flows to North America.
Suezmax demand is projected to rise by about 10%, as West African exports to both Southern and Northern European refiners accelerate and a long-haul fuel oil trade from Rotterdam to Singapore emerges.
Demand for Aframaxes is expected to decline by about 1.5% this year, as growing trade within the North American region is not enough to offset declines in the staple Northern European market.
LR2s will see demand increase by 3.5% in 2015 from last year’s levels, as refinery closures in Northern Europe have increased clean product flows from the Middle East and the Indian sub-continent to this region.
With a market share of 20%, LR1 tanker demand will rise by 6.2%, as expanding refining capacity in the Middle East and other emerging markets will satisfy demand to Northern Europe and the Far East.
MR2 tonne/mile demand is expected to rise by 8.3%, despite lower voyage lengths amid increased gasoline consumption from the US and other Atlantic Basin consumers.
As for global economic output, this will register 3.3% in 2015 and 3.8% in 2016, as a recovery in Europe joins stable growth in the US. Chinese output is expected to remain around the official target of 7% in 2015 before declining to 6.3% in 2016, unless the Chinese government introduces stimulus programmes.
Global oil demand is expected to rise by about 1.4 mill barrels per day this year from 2014 levels, reaching 94 mill barrels per day.
Non-OPEC supply growth from North America will continue albeit at a more gradual pace, reaching 20 mill barrels per day by 2016, while OPEC will continue to produce above its production quota of 30 mill barrels per day.
Global dirty fixture activity reached about 5,090 fixtures through July, a decline of roughly 7% year-on-year. The VLCC segment posted a 1% increase, while Suezmaxes saw more-or-less the same amount of volume year-on-year.
TCEs have been supported by lower bunker prices and the VLCC benchmark route - AG/Japan - has averaged roughly $63,000 per day through July. The West Africa/UK-Cont Suezmax trade averaged about $40,700 per day.
The decline seen in fixing levels stemmed from the Aframax and Panamax classes, which fell by 16% and 7.5%, respectively, McQuilling explained.
Clean tanker spot activity rose almost 30% year-on-year, as the increase in refining capacity in the Middle East supported smaller clean tankers. Robust naphtha demand in the Far East, particularly Japan, was the driving force behind the LR2s and LR1s.
As a result, the LR2 segment posted a 19% increase in spot fixture volume year-on-year, while LR1s climbed 9%. Earnings on the AG/Japan route for these two classes averaged $29,500 per day and US $24,800 per day, respectively. MR2 spot activity rose 32% year-on-year, while MR1s climbed 52%.
The first half of the year saw a net tanker fleet growth of 54 vessels. On the dirty side, 30 vessels joined the fleet, led by Aframaxes. At the same time, nine dirty tankers exited the fleet. On the clean side, there have been 43 newbuilding deliveries, 60% of which were MR2s. Just 10 clean ships exited the trading fleet through July, the consultancy said.
Newbuilding values were relatively unchanged in the first half of the year amid a strengthening US dollar. Modern secondhand crude tanker values were up between 10%-13%. The 10-year old crude tankers were led by the Aframaxes, which were up 25%. We expect the older tankers to rise through the end of the year with an improving earnings environment.
Secondhand clean tanker values were mixed with 10-year old LR1s down 11%, but LR2s were up 9%.
McQuilling Services ‘2015 Mid-Year Tanker Market Outlook Update’ can be purchased online at www.mcquilling.com/reports.html.