SINGAPORE: Should the IMO decide to introduce a 0.50 per cent global cap on shipping’s sulphur emissions from 1 January 2020 Singapore can be expected to become a net importer of gas oil, Howe Robinson Partners head of tanker research, Stavroula Betsakou, told Tanker Shipping & Trade in an exclusive interview. Ms Betsakou identified the upcoming IMO meeting later this month, where the IMO will decide whether to introduce the cap in 2020 or 2025, as the biggest issue presently facing the market.
A decision for 2020 will be a catalyst for refinery additions, upgrades and expansions, said Ms Betsakou. But, will also create market confusion on where to source 0.5 per cent gasoil. Long haul trades could benefit with Ms Betsakou identifying refineries in the Middle East, Korea, China and India as the likely providers.
Discussing the market more widely, Ms Betsakou says a cold winter will boost product trades, encouraging over-supplied stocked to be drawn down. “Over supply of stocks across all the main consuming nations has limited the pricing signals for arb trades and therefore limited trade growth so far this year,” she explained.
The biggest threat to product trades remains crude tankers. “Not only will they be taking clean cargoes as they come out of the yard – and therefore removing a lot of the clean cargo base – but low crude carrier earnings are capping earnings on the product side.”
Ms Betsakou also touched upon China ‘producing far too much product for its domestic needs’; India ‘possibly a net importer of products before the end of the decade’ and the United States, destined to ‘become a bigger player in product exports’.
Turning to the product tanker fleet Ms Betsakou asserts: “There is a right price for everything”. The opportunity on the investment side probably lies with MRs, although she says the comment is probably more apposite for the secondhand market.
But there is little doubt, says Ms Betsakou, that when she presents at the Tanker Shipping and Trade Conference and Awards on 15 November, most people will be focussed on the IMO’s global sulphur cap and especially what it means for fuel costs.
