first_imgzoomIllustration. Image Courtesy: Pexels under CC0 Creative Commons license The tanker market has been in the doldrums for some time now, and times have been extremely tough for the crude carriers.However, industry major DHT Holdings expects the times to take a turn for the better due to four key reasons.Firstly, global demand looks healthy and steady with 1.3 million barrels per day expected for the remainder of the year and 1.2 million barrels per day for 2019, DHT’s Co-CEO, Svein Moxnes Harfjeld, explains.The second reason is the inventory drawdown gain in the second half and likely in the last quarter.On the supply side, fleet growth has been negative year-to-date, possibly in the amount of 10 VLCCs.And finally, the orderbook stands at 14 percent of the total fleet, and this should be compared to 24 pct of the fleet in excess of 15 years of age, Harfjeld adds.Speaking on the geopolitical situation and tensions between China and the United States and their potential impact on the freight markets, Harfjeld said that some 375,000 barrels per day of U.S. shale might be lost from this trade.“Whereas this sounds as a negative, we see signs of the North Sea and South America stepping into fill the void, and these trades are also VLCC trades,” he added.As these trades are of similar length as the U.S. export trades, the impact on VLCCs is predicted to be neutral.The U.S. has made a stronger grasp of other markets such as South Korea, with refiners increasing import of U.S. shale that has resulted in 4 to 5 VLCC cargoes per month.  India is also increasing U.S. shale purchases, reported to be about 10 million barrels for August.What is more, the U.S. shale could also divert sales to Europe to partly replace loss of Iranian barrels and likely in smaller ships.“And China is expanding its refining capacity this year and a total of 1.2 million barrels per day of new capacity is due to come on stream later this year. Combined with the domestic production in decline, we expect imports to bounce back once the maintenance season ends later this quarter,” he pointed out.“And lastly, there has been further consolidation in the freight markets. And we welcome stronger and well behaved players.”DHT Holdings reported a net loss for the second quarter of 2018 worth USD 28.2 million and a net loss of USD 37.4 million for the first half of the year.In August, the company entered into 5-year interest rate swaps with Nordea totaling USD 168.8 million with an average fixed rate of 3.01 pct – as compared to current 3m Libor of about 2.34 pct. USD 168.8 million equals 22 pct of total outstanding bank mortgage debt.last_img