Tanker Euphoria Drives Ratings Bump

Monday, July 17, 2000
The cyclical nature of the tanker market continues its trend upward, a development which has Lazard & Freres & Co. stamping both Nordic American Tankers (ASE: NAT) and Knightsbridge Tankers Ltd. (OTC- VLCCF) as shares that will “outperform.” In a pair of separate corporate profiles released June 29, Lazard & Freres’ James L. Winchester noted that “VLCC freight rates are continuing their meteoric climb in the second quarter, averaging $46,688/ship day, up an impressive 76.3% from $26,489/ship day in the first quarter and up 127.9% from $20,488/ship day generated in the second quarter of 1999.” In accordance with this information, Winchester has raised VLCCF’s 2000 dividend estimate to $2.32 from $2.29, a dividend which implies of yield of 11.9%. There are a myriad of factors driving the current VLCC surge, chief among them increased oil production and a lack of qualified tonnage. Oil production was boosted by a 708,000 bpd rise in OPEC quota, agreed June 21 to help keep oil pricing in the desired $22-$28 range. In addition, there has been increased scrapping activity, as older tonnage has paid a high price due to recent disasters such as Erika. Scrapping is running an estimated 14% ahead of 1999 rates, and delivery of new tankers is expected to slow to 16.1 mdwt from 20.7 mdwt. In exploring Nordic American Tankers, Winchester noted that average Suezmax tanker freight rate has averaged $34,883/ship day through the second quarter, up 134 percent from $14,910/ship day generated in 2Q 1999. For NAT, Lazard Freres raised 2000 dividend estimates to $2.15 from $2.08, implying a yield of 12.7%. In its analysis, based on the OPEC increase and a five percent increase in worldwide oil demand projected by IEA, Lazard Freres believes these trends will continue to benefit demand for tankers into 2001.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

First MAN D2676 Workboat Engine Ready for Launch

Last December, MAN Engines introduced its latest generation in-line six-cylinder engines for workboats. Now the first MAN D2676 LE443 engine off the production

Multraship’s New ASD Tugs Named in the Netherlands

Two Damen ASD 3212 tugs for towage and salvage specialist Multraship have been named on June 24 at Terneuzen, the Netherlands.   The Multratug 29 and Multratug 30,

Silver Ships Delivers Fire/Rescue Boat

Silver Ships, Inc. has recently delivered a 34-foot custom designed and purpose-built all-welded aluminum fire/rescue boat to the Islip Fire District on Long Island, New York.

Finance

Baltic Index Rises for Fifth Consecutive Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday for a fifth straight session on stronger demand across all vessel segments.

Singapore Exchange, Baltic Exchange Continue Transaction Talks

Singapore Exchange (SGX) has agreed with the Baltic Exchange Limited (Baltic Exchange) to extend the period of exclusive discussions regarding a cash offer for

Hanjin to Return 38 Vessels Next Year

Hanjin Shipping is planning to return a total of 38 chartered vessels once their contracts end as part of its restructuring efforts, reports the Korea Herald. A

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Repair Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1665 sec (6 req/sec)