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 Reporter March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

First Supramax Vessel for Japan-Italy Venture

'DACC Tirreno' was delivered at the Oshima shipyard in Japan yesterday, the first of four Supramax bulk carriers for the dACC Maritime Limited fleet, the joint

Austal Graduates 48 4-Yr Apprentices

Austal USA combined two classes to graduate a total of 48 members of Austal’s cutting-edge four-year apprenticeship program yesterday at a formal ceremony held at the Arthur R.

BAE Systems to Expand San Diego Shipyard

BAE Systems announced it will invest approximately $100 million to expand drydocking capabilities at its San Diego shipyard.   The investment, which will include

Finance

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

India May Add Japanese Soryu-Class Submarines to its Fleet

India is reportedly considering a project to incorporate six Japanese Soryu-class diesel-electric submarines into its fleet, says The Japan Times.   The Defense

 
 
Maritime Contracts Maritime Security Navigation Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1213 sec (8 req/sec)