August 14, 2015 [Platts] - The oil tanker market is expected to see delays in deliveries of cargoes to China because of the massive explosions at Tianjin port overnight, market sources said Thursday, adding that the disruptions will likely be temporary because the fatal accident has mainly affected the port's container terminal.
Two blasts occurred at a warehouse storing dangerous and chemical goods in the port area of the city at midnight, local media reported.
At least 44 people have been reported dead so far, with more than 500 injured.
A breakdown in the port’s IT system has affected customs processing, preventing ships from being allowed to enter the port, brokers said, adding that at least one VLCC — the Samco Europe — has stopped discharging at the port.
Total, the company currently managing the ship, couldn’t immediately be reached for comment.
Shipping industry sources said that the closure is likely to be temporary, for security and safety reasons, adding that tanker-related operations will resume soon.
Most of the tankers discharge from neighboring terminals at Caofeidian and Xingang, and shipping agents in Tianjin haven’t advised on rescheduling of deliveries, they said.
“I would expect there will definitely be some delay,” an executive with one tanker management company said. One of the company’s ships is scheduled to berth at Tianjin on Friday.
The fire due to the explosion has still not been completely doused, a chartering source with another trading company said, adding that there will be a delay in shipments to China and “our shipping agents are unsure about time frame for resumption of operations.”
Market participants have said so far that there are no plans to divert cargoes to other ports.
The oil and refinery terminals are at least 25-30 miles away from the site of the tragedy, a chartering manager with a global commodities trading company said.
“Vessel movement along the sea route in Tianjin was suspended by the Maritime Safety Administration…Oil vessels are not allowed to enter or leave the port due to safety reasons,” a source from the port who is responsible for oil loading and offloading told Platts.
“But our facilities are safe and in good condition as they are a few kilometers away from the blasts, which allows normal discharging or loading of crude and oil products,” the source said.
The entire port is closed because the channel approach for all terminals passes by the same area, said a shipping agent dealing with oil shipments to China from Southeast Asia.
“The port authorities are holding back traffic movements until they clean up the mess and oil terminal operations will resume [latest] by tomorrow,” the agent said.
Tianjin has a concentration of refineries, including major ones owned by Sinopec, PetroChina and CNOOC, which refine imported crude discharged at Tianjin port and domestic crude oil produced in the area.
However, the tanker berths and terminals are fully segregated from the container terminal where the warehouse in which the blast occurred was located, said a VLCC broker in Singapore.
The port is designed to handle 20 million mt/year of oil (401,643 b/d).
A source from Sinopec’s Cangzhou refinery, which processes imported crude oil discharged in Tianjin port, said the blast has had no impact on its supply so far.
The massive explosions have not damaged oil facilities at the port.
