New York: China’s rampant oil imports are the subject of the latest weekly report from brokers Poten & Partners. The US outfit is convinced Chinese oil import growth will continue strongly through to 2016, but asks where the rest of global demand will come from to sate the slew of new VLCCs coming to the market.
On a more depressing note Poten reckons that VLCC activity in the first half, which has been better than expected, is more “ephemeral”, suggesting that demand growth “may slow” for the remainder of the year.
In 2011, more than one fifth of total VLCC employment was dedicated to Chinese crude imports, according to Poten, and this proportion has doubled since 2005
“This trend in the Chinese share of VLCC demand should continue, as Chinese refiners lift an additional 1.1mbpd of AG crudes, 0.4mbpd of Latin American grades and 0.8mbpd of WAF cargoes during 2011-16,” the New York-based broker noted. In fact, this forecast pattern of Chinese imports would imply that VLCCs capture 83% of incremental Chinese tonne-mile demand during the period.
“This figure is impressive, but implies approximately 70 VLCCs worth of incremental demand from 2011 to 2016. With the current VLCC orderbook near 100 vessels, other importing regions need to add to VLCC demand to help rebalance supply and demand,” Poten concluded. [19/06/12]