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Impact of Cargo Switchovers on LR2 Utilization

Sept. 24, 2021

Tracking and measuring CPP demand on LR tonnage can be challenging at times, due to the fact that these vessels are able to switch between carrying clean petroleum product and carrying dirty ones such as fuel oil and crude. The practice is especially prevalent on the LR2/Aframax class since most of these tankers (especially the more modern ones) come coated with materials that allow both instances.  To address that, we have developed a methodology that accounts for the actual cargo carried by these vessels when measuring ton-day demand, with some interesting patterns emerging.

After the intense volatility recorded in ...

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CPP Fleet Profile and Contracting

Sept. 17, 2021

On a relative basis, freight rates for CPP tankers have outperformed the DPP vessels segments, due in large part to the supply side variable.  In fact, in our recent TMO Mid-Year Update we reiterated our call for a healthier and speedier recovery of the CPP sector (following our January projection), aided by the number of CPP tankers that have been deleted so far in the year as well as a more tempered orderbook. 

Continuing a multi-year trend, we note owners’ interests continue to lie within the LR2 (coated Aframax) and MR2 (Chemical – IMO II/III) sectors.  Orderbook figures at this ...

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DPP Fleet Profile and Contracting

Sept. 10, 2021

Since the beginning of the year and our Tanker Market Outlook, we have been noting the importance of the supply side dynamics in both DPP and CPP sectors, with an emphasis on the former given past two years saw historically very low deletion numbers.  In our recent Mid-Year Update publication, we reiterated our position, especially since 2021 is shaping up to be another year of low DPP tanker deletions amid a depressed freight market. 

Looking at the DPP fleet orderbook percentages, they have increased for VLCCs and decreased for Suezmaxes from the beginning of the year.  For the former, the ...

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CPP Ton-Mile Demand Development

Sept. 3, 2021

Continuing on the theme of tanker demand updates, this week we focus on the CPP sector.  Since the publication of our January Tanker Market Outlook report, we have been constructive on CPP tanker demand growth, a position that we retained in our recently published TMO Mid-Year Update, owing to overall increasing demand for refined products as well as the structural benefits from expanding voyage mileages.  Downside risk to clean tanker demand from Crude Tanker newbuildings is expected to continue for the next six months but subside by 2H 2022.

The aggregation of ton mile demand reveals an increase of 3 ...

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