I don’t see any drastic changes this year. If you look at current pricing, some spreads have widened significantly. For example, spreads have moved from $0.60 just two weeks ago to $2–$3.50 now. This indicates a strong demand for middle distillates and crude in Asia. Western sanctions on top-tier fleets and the resulting restrictions have tightened the market, increasing prices. Despite this, demand remains robust. And while there may be some increased demand shifting toward India, I don’t anticipate a major decline in China’s demand this year. Physical demand through the DME remains solid. While market share has dipped slightly compared to last year, the change isn’t substantial. We’re now in our third delivery month of the year, and in January, we were already working on March loadings. Volumes are steady, and we’re seeing consistent trends.
Many do question how robust China’s GDP prospects will be this year?
Interpreting China’s economic data today isn’t as straightforward as it was a few years ago. A PMI below 50 is usually a cause for concern, but you can’t ignore the Chinese government’s significant investments and funding initiatives aimed at stimulating the economy, and I see these continuing this year. When speaking to clients, I do sense a level of positivity. The general feedback is that they’re expecting a “flat” year, but in the context of China, a flat year still means growth.
What about the impact of possible US tariffs on various countries?
The inflationary pressures we’re seeing in the West could be significant. We may see the beginnings of a commodities super-cycle, and if that happens, it could put the West in a challenging position while potentially benefiting the East, so we might see a shift in where growth originates.