Suezmax Tankers: Lifeline Ahead?
Tuesday, December 17, 2013
Tankship image courtesy of Torm

Despite the firming of broader demand fundamentals short-term, the Suezmax sector still faces more wild cards that other sectors in the years ahead, considers Poten & Partners in a recent Market Opinion from their Commodity Consulting & Analytics department. Excerpts follow:

Last week, the Suezmax sector finally began to cash in on the freight rate gains exhibited by their larger VLCC cousins over the past two months.

Historically, these two markets have tended to move in tandem since both vessel sizes service West African export requirements. Because cargoes in West Africa are generally stemmed in one million barrel parcels, charterers can arbitrage the differential in freight rates by co-loading two cargoes on one VLCC instead of chartering two Suezmaxes.

As a result, strong VLCC rates have allowed for upward movements in Suezmax rates. While this current uptick in freight rates might merely be seasonally-lived, longer-term positives exist for this semi-slighted sector.

Two additional factors helping to drive the Suezmax market outside of the general correlation with VLCCs are the growth in exports from West Africa to the East and a potential balancing of the orderbook against possible demolition candidates aged 15 years or older that is likely to take place in the next few years.

Suezmax fleet excess unlikely
From a supply perspective, the best news for existing Suezmax owners is the small size of the orderbook relative to the number of vessels 15 years or older. The current orderbook amounts to a little more than 10% of the 440 ship fleet; however, 13% of the fleet is 15 years or older suggesting that there may be slight contraction in the fleet over the next several years.

The development of new trade patterns, particularly those with longer voyages, has led to unpredictable regional availability; bucking monthly and seasonal trends for supply and demand. At the end of the day it will be the moderation of tonnage supply will be the most important factor in supporting rates going forward.

 Source: Poten & Partners



Maritime Today

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

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

People & Company News

Maersk Venturer to Drill for Total

Maersk Drilling has been awarded a contract for the drillship Maersk Venturer with oil major Total. The contract covers one exploration well (estimated duration

Shipping Industry Supports Global Climate Change Deal

The global shipping industry, represented at the United Nations Conference in Paris by the International Chamber of Shipping (ICS), fully supports a global deal on climate change.

DNV GL Approval for DSIC's LNG-fuelled VLCC Design

DNV GL has presented Dalian Shipbuilding Industry Company Limited (DSIC) with an Approval in Principle (AiP) certificate for a new LNG-fuelled very large crude

Tanker Trends

Frontline 2012, Frontline Merger Completed

Frontline 2012 Ltd. has completed its previously announced merger with Frontline Ltd. , with Frontline as the surviving legal entity and Frontline 2012 becoming

EuronavSells Suexmax Cap Laurent

Euronav NV announced the sale of its Suezmax Cap Laurent for $22.25 million. The 1998-built 146,145-dwt vessel was wholly owned by Euronav.    The vessel was

Hoegh LNG Q3 Profits Disappoints

Oslo-listed Hoegh LNG, whose floating plants turn liquefied natural gas (LNG) into gas, reported on Monday third-quarter earnings below forecasts and offered a dividend of $0.


MacArtney, Moog Focal in Expansion Mode

Moog Focal Technologies Corporation and the MacArtney Group have agreed to intensify their multi-service partnership aiming at expanding their long-term business

GOST Debuts New Technology at Workboat

GOST (Global Ocean Security Technologies), celebrating its 10th year as a world leader in marine security, tracking, monitoring and video surveillance systems,

USN Issues Full Funding for LCS "Cooperstown"

As part of the Littoral Combat Ship (LCS), the US Navy has awarded to the consortium which includes Fincantieri, through its subsidiary Fincantieri Marinette Marine (FMM),


Barge-Rail Service on Upper Columbia, Snake Rivers

Container barge service is back on the upper Columbia and Snake rivers.The Up river Container Barge-Rail Shuttle will help importers and exporters in eastern Washington,

CMA CGM Seeking Funds for NOL Takeover

France’s CMA CGM has approached banks to finance its potential takeover bid for Singapore’s Neptune Orient Lines Ltd (NOL), reports Bloomberg.   The world’s No.

Green Signal to New Access Channel to Port Said East

The construction of a wide access channel to Port Said East, as the side channel project, has officially received approval.   The head of the Suez Canal Authority (SCA),

Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Pod Propulsion Ship Electronics Ship Repair Shipbuilding / Vessel Construction Winch
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: 0.1081 sec (9 req/sec)