Tanker Market in Upward Journey: Ardmore
The MR (Medium Range Product Carrier) product and chemical tanker market continues its upward trend, with charter rates higher in the first quarter on the back of continued strengthening supply-demand fundamentals and further supported by prolonged winter market conditions.
According to Anthony Gurnee, the Company's Chief Executive Officer of Ardmore Shipping Corporation this trend is in spite of heavy refinery maintenance and upgrade downtime as the global refinery complex prepares for the IMO 2020 marine fuel transition, partially masking the extent of the underlying strength.
As refineries return to full operation and anticipated heightened levels of throughput in the second half, we expect that product tankers will experience a meaningful increase in demand, said the CEO of the operator of product and chemical tankers.
On top of strong underlying demand growth, the transformation of global energy supply chains in response to IMO 2020 has the potential to be a major cyclical catalyst for product tankers.
With the global refining industry preparing to meet a significant step-up in demand for low sulphur fuels, we expect an additional layer of MR demand, conservatively at 5%, commencing in the second half of 2019, with the potential to last two years before markets reach equilibrium.
In addition, an exceptionally low orderbook combined with ongoing scrapping should result in constrained MR net fleet growth for the next two years, setting the stage for a sustained upturn.