The broker quotes one source as estimating the East African products market is worth around $15bn. Not only has product demand been growing but cargoes are being sourced from further afield than the Gulf or India - from Singapore for example - increasingly bringing the larger LR2s into the equation. Because of the 'creaking port infrastructure' on the Mozambique Channel cargoes are frequently split and ship-to-ship transfers are commonplace. Only Mozambique can accommodate LR2s. The Tanzanian Port Authority completed a single-point mooring off Dar es Salaam for offloading gasoil.
Traders are scrambling to capture a share of what is now a very lucrative market according to Gibson. Most of the major players have increased their presence and the consensus is the business will continue to grow. Refinery expansion in the region is stagnant - a $1.2bn plan to expand the dilapidated Kenya refinery was shelved earlier this year despite the growth of demand. Most investment in the region seems to be geared towards onshore and offshore gas. The Pan-African Ecobank estimates demand in 11 countries of the region is about 330,000 b/d (mostly net imports), which could rise to 500,000 b/d by 2020.
As a result, from a low point of below WS80 in mid-2009, MR rates Mid-East/East Africa in 2013 WS flat rate terms, have oscillated between WS140 and WS240 from 2010 onwards - mostly at the upper end of the range. Currently they are at around WS200 which equates to earnings of around $8,000 a day on a 35,000 tonne cargo according to Clarkson Research.
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