Product tanker values could fall by a fifth if the European sovereign debt crisis negatively affects all global economic markets and creates a significant drop in demand to ship refined oil products.
This “stress” scenario is in contrast to the team’s base case forecasts, which would see improving oil products demand absorb tonnage from the fleet and increase utilisation levels so that the fall in asset values would bottom out by the end of 2012.
“Fleet utilisation for the product tanker market is expected to remain less than 90% until 2013, which has interestingly been a trigger in supporting asset values historically, ie as long as fleet utilisation remained above 90%, there was a strong chance that higher asset values would be supported even if earnings started to decline,” said DVB’s latest Product Tanker Market Outlook 2011 report.
It calculates that in 2013 total fleet utilisation levels will increase to 86.8% from a low of 86.2% next year. This is as refined product seaborne cargo volumes are anticipated to rise from an estimated 830.4m tonnes this year to 873.5m tonnes in 2013 and 938.2m tonnes by 2016, it reports.