Coronavirus slashes China crude import demand
Written by Nick Blenkey
To gauge the impact of the coronavirus outbreak on the tanker market, VesselsValue has used satellite tracking technology to compared China’s real time demand for seaborne crude oil from the Middle East in recent weeks against the same period last year.
The coronavirus outbreak has coincided with Chinese New Year, so VV has tracked data from 2019 for comparison.
The data essentially shows the demand for crude tankers. The metric is in billion ton miles where a ton mile is a ton of cargo that’s travelled one nautical mile by sea.
In recent weeks, it can be seen to have fallen almost to zero from a 2019 average of 3.42 billion ton miles per day.
Most years, there is a mild slowdown of activity in Chinese ports surrounding the Chinese New Year, but this time the effects have been significantly compounded.
Across wider shipping markets, sale and purchase of vessels has almost stopped completely, says VesselsValue, newbuildings (which mostly happen in Asia) are being delayed due to the inactive workforce, and charter rates (vessel earnings) are down.
Based on VesselsValue charter rate assessment, the cost per day of hiring a Very Large Crude Carrier (VLCC) for 12 months has fallen by over 20% in the last one month or by $4 million over the period. From $53,460 per day on January 14, the rate has fallen to $42,250 today. Spot earnings have fallen by over 70% during the same period.
