FIS Tanker Market Overview: Small is beautiful
Smaller tankers continued to remain profitability as compared to the larger vessels like VLCCs, according to McQuillings Services.
The shipping consultancy estimated the earnings of VLCC at $11,000 daily, but only for the newly scrubber-fitted tankers, as they will be able to use the cheaper, higher-sulphur marine fuels.
So far, the tanker market did not live up to market expectation for the new year when oil demand is estimated to recover to pre-pandemic levels, given the gradual opening of global economy and borders.
However, the Russia-Ukraine conflict and strict lockdown in China had backpedaled the demand recovery processes, and this bearish outlook had impacted on the newbuilding orders list as well.
Tanker orderbook-to-fleet ratio was heard to the lowest in more than 20 years, as Lloyd’s List Intelligence indicated tankers including pure chemical tankers, comprise some 20% of the global shipbuilding orderbook by volume, followed by container ships comprise 12%, and bulk carriers 22%.
Meanwhile, the LNG carriers comprised only 3% of the total orderbook but accounted the highest fleet-to-orderbook ratio for any segment with new orders of 160 vessels on top of the existing 670 LNG fleet.
Technical view of the tanker market (TD3C):
May Futures – The April RSI moved above 50 last week, resulting in the futures trading up to, but not above, the USD 9.4601 resistance before correcting.
The May futures, however, have traded above the USD 9.6550 resistance, meaning we now target the USD 10.3000 high. Downside moves that hold at or above USD 8.7294 will support a bull argument. Below this level the technical will have a neutral bias.
Upside moves above the USD 10.3000 high have the potential to create a negative divergence with the RSI. If we do, it will warn we could see a momentum slowdown.
The RSI is at 64 whilst its moving average is at 50 and sloping higher. This would suggest that support levels should hold if tested (current Fibonacci support is at USD 9.2144, USD 9.0085, and USD 8.7294.
Technically bullish.
Written by Titus Zheng Shujian and Edward Hutton, Edited by Chris Hudson (https://freightinvestorservices.com/fis-live/).
