Spot freight rates in the tanker segment are set to go up in the next few months as a result of rising diesel imports from China. The Asian country has been stocking up on diesel following the recent earthquake, even as state-owned oil companies are importing the fuel in large quantity ahead of the forthcoming Olympics. Despite recent fuel price hikes in several Asian countries, there is a surging demand for fuel, triggering a rush for imports and leading to a spurt in shipping freights. Indian shipping companies such as GE Shipping and Shipping Corporation of India have a majority of their fleet capacity in the tanker segment and this increased demand is expected to help them get better returns, point out analysts. GE Shipping at the time of announcing its FY08 results in May 2008, had a fleet capacity of 43 ships, of which 31 were in the tanker segment.
International media reports highlight that China is importing 175,000 barrels a day of diesel in June this year, a jump of 33 per cent from the level imported in the previous month. The demand is mainly to meet the gas supply in major cities, which had been disrupted during the recent earthquake.
Moreover, a strong demand from Western refiners to transport crude oil from West Asia ahead of the peak summer driving season in North America is also driving up the demand for tankers.
As a result, spot freight rates for VLCCs (very large crude carriers that are used to transport oil from West Asia to North America and East Asia) are currently ruling at $114,313 a day compared with the average spot freight rate of $57,393 a day in the March 2008 quarter.
In the other tanker segments like the Suezmax, the current spot freight rate is $62,390 a day compared with the average spot freight rate of $36,034 a day in the March 2008 quarter.
International media reports highlight that China is importing 175,000 barrels a day of diesel in June this year, a jump of 33 per cent from the level imported in the previous month. The demand is mainly to meet the gas supply in major cities, which had been disrupted during the recent earthquake.
Moreover, a strong demand from Western refiners to transport crude oil from West Asia ahead of the peak summer driving season in North America is also driving up the demand for tankers.
As a result, spot freight rates for VLCCs (very large crude carriers that are used to transport oil from West Asia to North America and East Asia) are currently ruling at $114,313 a day compared with the average spot freight rate of $57,393 a day in the March 2008 quarter.
In the other tanker segments like the Suezmax, the current spot freight rate is $62,390 a day compared with the average spot freight rate of $36,034 a day in the March 2008 quarter.