LONDON, Dec 14 (Reuters) – Commodities trading firm Trafigura expects tougher conditions in tanker markets next year as weaker world economy prospects and a slide in oil prices are set to take their toll on shipping.
Bargain hunters picking up cheap crude after the price drop and refineries, which have been very busy meeting rising demand, have helped tanker markets experience their best earnings in years after a long period of losses.
Rates for crude supertankers have soared in recent weeks to over $110,000 a day – their highest since 2008.
Trafigura, one of the world’s leading shipping market players, said it had enjoyed a strong year helped by low fleet growth and buoyant demand to transport both crude and oil products.
The number of tanker fixtures the group was involved in this year soared to 1,959 bookings versus 1,600 fixtures in 2014, it said.
“Looking ahead, 2016 looks to be a more challenging year as flagging global economic growth and the knock-on effects on oil demand feed through to the freight markets,” Trafigura said in its annual report.
Trafigura posted a 6.5 percent rise in annual net profit on Monday as it racked up record oil trading volumes, as well as an increase in metals.
“A strong tanker market contrasted with conditions of over-supply and less demand in dry freight,” Trafigura said.
Slower coal and iron ore demand from China – the world’s biggest industrial importer – and overcapacity have battered the dry bulk sector, already in its worst ever downturn.
The worsening conditions led to the Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities and seen by investors as a forward-looking indicator of global industrial activity, plunging to an all-time low last month.
“The outlook for 2016 remains difficult with the market continuing to be over-supplied and continued uncertainties about the outlook for demand of dry bulk commodities such as iron ore and coal,” Trafigura said. (Reporting by Jonathan Saul, editing by William Hardy)