Domestic suppliers’ share of the total could fall as cheaper producers like the big three iron ore suppliers ramp up production.
There are three main factors that have contributed to weak oil consumption: slow recovery, fuel economy, and cheaper substitute energies.
While the recent declines in steel prices might have contributed to weaker iron ore trade, investors may expect steel prices to rise.
A key trend has been developing in the United States and has been benefiting product tankers in the U.S. energy space.
October’s Real Estate Climate Index isn’t particularly strong—likely because China’s current economic growth isn’t as robust as the past.
There are many indicators investors can use to get a perspective of iron ore and coal shipments. One of them is crude steel production.
On November 8, the overall orderbook for product tankers stood at 12.43% of existing capacity measured in dwt (deadweight tonnage).
Two ongoing themes that are currently affecting product tanker demand include higher U.S. oil output and increased refining capacity.
China is a major destination for all dry bulks. China’s share of global dry bulk imports has increased at incredible rates over the last decade.
Despite a larger orderbook, TNK expects significant delays or possible cancelations because shipyards in China and Brazil are having problems.
According to management, Teekay Tankers’ better third quarter 2013 earnings were largely driven by stronger Aframax and Suezmax spot rates.
This third quarter’s results were a significant improvement from the third quarter of 2012 and from the second quarter of this year.
The continued increase in U.S. oil production, due to an energy boom, will continue to negatively impact oil imports over the medium and long terms.
Management sees continued improvement in fundamentals and believes the overall tanker fleet may shrink in the coming years.
Crude tanker stocks have underperformed the Guggenheim Shipping ETF (SEA) and the SPDR S&P 500 ETF (SPY) over the past 12 months.
It’s not beneficial to own tankers in the short to medium term, as has been the case since 2011, as rates are now so low.
While the VLCC data is positive, the picture for the crude tanker business remains mixed. This could portray a short-to-medium-term negative outlook.
October’s increase is generally positive for the long-term prospects of tanker stocks like Frontline ltd. (FRO) or Nordic American Tanker Ltd. (NAT).
Find out why we remain optimistic about the future prospect of the dry bulk shipping industry over the next few months and quarters.
Ship scrapping data is released weekly by IHS Global Limited. From October 25 to November 1, the crude tanker industry scrapped two vessels.