Drewry Sheds Light on Uncertain Tanker Market

Wednesday, September 17, 2003
Drewry's latest “Annual Tanker Market Review and Forecast 2003/04” cuts through the confusion and conjecture to provide an independent viewpoint Drewry Shipping Consultants, the world’s leading maritime consultants, today announced that its latest report, “Annual Tanker Market Review and Forecast 2003/04”, has been released. The research and analyses is being published at a crucial time for an industry that, despite having enjoyed buoyant times of late, is now facing a period of uncertainty that has been precipitated by the introduction of new legislation. “The prognosis, unfortunately for owners, is that the best is behind us and the correction in the freight markets is here to stay. Global oil demand is expected to grow slowly as the economy struggles to find its feet again, the threat of terrorism continues to prevail and the tanker orderbook has once more started growing,” commented Capt. Saurabh Nakra, Senior Consultant at Drewry. “The silver lining exists in the shape of increased pressure to accelerate single hull tanker scrapping with the EU having passed its set of stringent requirements. It now remains to be seen whether other countries and the IMO will follow suit with either country-specific or industry-wide single hull bans.” Drewry's report also warns owners of over-ordering new tankers and points out that the current orderbook is in excess of 28% of the current fleet. In looking at the current scenario, Capt. Nakra says, “Low newbuilding prices and the improving freight rates provided an ideal market situation in prompting owners to place orders for new tonnage and to exercise their options. In addition to the increasing freight rates, changes in the regulatory environment, pertaining to single hull tankers has also acted as a catalyst in pushing up the newbuilding orders. Inevitably the orderbook, which had at least been on a downward trend (albeit still representing some 25% of the current fleet) towards the end of 2002, rapidly reversed the recent losses and increased again past 80m dwt, which is well over 28% of the existing fleet. In fact, the supply side is likely to remain in the limelight for many months, and that is not surprising when the orderbook implies a supply side addition equivalent to over 9m dwt for the remainder of 2003.” The report looks ahead for the next five years and provides detailed forecasts for tanker demand and fleet supply. Both of these variables are predicted to grow steadily over the period and while Drewry expects that the peaks seen early this year are unsustainable, the market will retain its underlying strength well into 2004. The publication this year, in addition to its well-established regular sections, covers the Suezmax fleet as a special feature. One of the areas covered in this feature is an analysis of the fleet age profile, as well as a breakdown of the current orderbook by the same criteria. The analysis also goes on to look at changing carriage patterns in traditionally strong regions for the Suezmax trades. “Annual Tanker Market Review and Forecast – 2003” is published by Drewry Shipping Consultants Ltd. Individual copies of the report are priced, including postage to any part of the world.
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