Supertanker rates are poised to surge to a two-year high by December as China's demand for oil sends ships the equivalent of 11 extra times around the globe in a month.

The 31 percent jump in China's imports increased return journeys for supertankers to about 1.13 million miles in April, or 284,000 miles more than a year ago, based on customs data and voyage lengths. Daily rates may reach $100,000 by December, said Rikard Vabo, an analyst at Fearnley Fonds ASA, whose November recommendation to buy shares of Frontline Ltd., the biggest supertanker operator, earned 49 percent. His prediction for freight is 43 percent higher than the June 11 price of $70,025.

China, the engine of the global economic recovery, is going further to get oil, with Angola a bigger provider than Saudi Arabia this year. Longer journeys combined with what the International Energy Agency says will be record consumption in 2010 are driving shipping demand even as forward freight agreements show prices will average $44,944 for the third quarter and $45,466 in the fourth.

"China is the U.S. of the 1960s and Japan of the 1970s as its thirst for oil grows," said Charlie Fowle, chairman of London-based shipbroker Galbraith's Ltd. "As China strengthens ties with countries such as Angola and Venezuela, in addition to Middle Eastern suppliers, it increasingly means tighter supply in the tanker market."

Eoin Treacy's view Shipping rates across the dry bulk and crude oil sectors soared in the period prior to the financial crisis and plummeted as the global economic slowdown took hold. Orders for new ships were at record levels prior to the crisis both because of the requirement for double hulled vessels in the supertanker sector as well as to replace older vessels. However, as rates dropped and access to credit evaporated the viability of many shipping business models was called into question. Dividends were cut to the bone and share prices fell heavily.

However, oil and other industrial resources prices, while volatile, have bottomed. Global trade is picking back up, led by emerging Asia and Latin America. Shipping rates are improving and some shipping companies are beginning to raise their dividends once more.

Frontline, (which I hold as an investment for my second daughter) increased its dividend from 25¢ to 75¢ from the1st to the 2nd quarter. The share price ranged above the yearlong base from April and broke upwards last week. A sustained move back below NOK180 would be required to question scope for further upside. (Also see Comment of the Day on April 21st).

Teekay Shipping has held its dividend at 31.635¢ per quarter since 2008 and prices have been ranging above $20 since October. It posted a new 52-week high today and a sustained move back below $22.50 would be required to question scope for continued higher to lateral ranging.

Ship Finance International which has both dry bulk and crude oil tankers has been slower to raise its dividend. However, it has a relatively consistent chart pattern, finding support near the 200-day MA from early May and a sustained move below $15 would be required to question scope for further upside.