Tankers: China continues to build ton-miles as Atlantic imports push higher – Chinese crude oil imports hit 8.1mbblspd in Sep-16, but from a tanker perspective a deeper dive in the sourcing of its imports reveal another supportive trend to a tanker market which is ‘written off’ until Q3/17 (once the seasonal trade dissipates). Imports from the Atlantic made up 2.1mbblspd in Sep-16 compared to 1.3mbblspd in 2015 – 60% increase. Angolan crudes were the main preference (1mbblspd), driven by both teapots preference for West African Lights as well as ‘crude-for-loans’ where Angola now delivers an equivalent of 5.4 VLCC cargoes per month to China. As we have previously highlighted, Brazilian crudes to China are also racing higher with Sep volumes at 0.5kbblspd - now on par with Venezuelan crudes who also have benefitted from ‘Chinese petrodollars’. The irony of crude-for-loan is the fact that the burden (for the likes of Angola and Venezuela) in volume is heavier in a low oil price environment which will continue to drive ton-miles higher. Despite being humble to the orderbook, we continue to see the sentiment towards crude tankers as too pessimistic.
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