China's economic slowdown may have hit the drybulk market hard, with imports of coal, iron ore and copper down, but it has not so far impacted the tanker market, in particular VLCCs.

Low oil prices have meant China has taken advantage to build its strategic reserves as well as commercial inventories. Crude oil imports in July hit a record 7.6m barrels per day (bpd) in July and are anticipated to remain high for the rest of the year according to London broker EA Gibson.

China is continuing to build vast storage caverns for oil. Several new facilities for oil storage are under construction and are expected to be filled as soon as they are opened. Oil reserves are currently about 30 days cover, including commercially owned stocks, but the target is 100 days by 2020.

Meanwhile crude tanker earnings came off towards the end of August despite this China boost. Earnings slid precipitously from mid-summer highs with VLCCs east and west under $25,000 a day, suezmaxes steadier at around $33,000 a day on average and aframaxes $28,000 a day. However, the last week has seen a welcome rebound in VLCC rates though suezmaxes and aframaxes have been struggling.

China's stockbuilding is likely to continue in overdrive as long as oil prices remain low and there is the prospect of post-sanctions Iranian oil hitting the international market next year to give a further boost to availability. Current world oversupply is reckoned to be 1.5m bpd.