Canadian Crude Weekly Exports to the United States on the Rise
Despite an overall drop in US imports of foreign oil, Canadian crude exports to the United States have surged in recent years.
For the week ended March 13, 2015, total products supplied stood at 19.5 million bpd. This compares to 18.8 million bpd in the same period a year ago.
According to EIA data, US crude oil imports averaged 7.5 million bpd for the week ended March 13, 2015. This was down by 703,000 bpd from the previous week.
Despite slowing GDP growth, China’s crude import growth hasn’t lost momentum. Imports were 25.55 million tons, or 6.69 million barrels per day in February.
China’s automobile sales have a significant impact on the shipping industry since auto sales drive oil consumption.
In February, the crude tanker orderbook increased to 74.3 million DWT from 73.8 million DWT in January, driven by the rise in VLCC and Suezmax vessels.
Five-year VLCC prices in February increased to $80.9 million from $80.7 million in January. Ten-year VLCC prices fell to $52.2 million from $52.8 million.
Newbuild VLCCs are the largest ship used to transport crude oil long distance. According to Lloyds List, buying a newbuild vessel is better than secondhand.
On a year-to-date basis, the Baltic Dirty Tanker Index declined 13.1% to 769 on March 20. On a year-over-year basis, the index recorded an 8.2% increase.
Industry analysts believe that with falling oil prices, a crude tanker boom, albeit a short-lived one, surely exists.
On a month-over-month basis, iron ore exports to China from Port Hedland increased marginally to 30.25 million tons in February 2015.
In the first two months of 2015, China’s crude steel output dropped 0.21% year-over-year to 130.5 million tons, according to government data.
Baltic Dry Index The Baltic Dry Index, or BDI, tracks a number of shipping routes and the prices paid for transporting major bulk commodities such as coal, iron, steel, and copper…
In 2014, China coal imports dipped year-over-year for the first time in six years. Imports fell 10.9% to 291.6 million tonnes.
China’s iron ore imports declined for the second straight month in February 2015, down 13.5% to 67.94 million tonnes over January 2015.
Because of a lengthy construction period, the price of newbuild vessels indicate the future rates of Capesize, Panamax, and Handymax—Supramax ships.
Just before the release of the official PMI data, the central bank in China cut interest rates by 0.25 percentage points.
Seasonality in Brazilian iron ore exports may improve the pace of shipments for the rest of 2015 and possibly buoy Capesize rates.
Like the cost of newbuilds, secondhand vessel prices are also on the slide. Five-year old Capesize prices dropped to $33.1 million in February 2015.
A thinning orderbook may indicate that investors and managers are cautious about the market, and so they are hesitating to place new ship orders.