Suezmax Tankers: Lifeline Ahead?

MarineLink.com
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
www.poten.com
 

 

 

Maritime Today


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

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

People & Company News

DP World to Manage Somaliland Port for 30 Years

DP World has reached an agreement to manage the Berbera port in Somaliland, which would allow it to become a major hub for goods to transit to and from the Horn of Africa,

Abu Dhabi Ports Try to Lure Chinese Businessmen

Abu Dhabi Ports - the master developer, operator and manager of ports and Khalifa Industrial Zone in the Emirate - presented the integrated offerings of Khalifa

NASSCO Lays Keel for Jones Act Tanker Liberty

U.S. shipbuilder General Dynamics NASSCO hosted a keel laying ceremony on Thursday, May 26 for the Liberty, one of three new ECO Class Jones Act tankers under a

Tanker Trends

A Year is a Long Time in Tankers

The latest Gibson Market Report focused on the age profile of the VLCC fleet and the prospects for trading life beyond 15 years of age.    Analysis of the Suezmax fleet shows a similar picture,

Strike In France: Implications for Tanker Demand

After the oil industry suffered from a severe drought in Venezuela, forest fires in Canada and rebel attacks on oil installations in Nigeria, it is now facing

Floating Storage Flattens Fortunes of $50 Crude

The prices of WTI and Brent crude briefly rose above $50/bbl during intraday trading on Thursday, the highest level seen since the end of July 2015, giving traders a brief moment of optimism,

Finance

CMA CGM Intends Offer to Acquire NOL

Following the satisfaction and waiver (as the case may be) of the conditions set forth in the pre-conditional offer announcement dated 7 December 2015, CMA CGM S.

Oman Shipping Makes Profit

Oman Shipping Company (OSC) reported a $180 million profit in 2015. Tariq bin Mohammed Al Junaidi, chief executive officer of OSC has been quoted by  Oman News

Korean Shipbuilder Could Be Liquidated

South Korea's STX Offshore & Shipbuilding Co. has filed for receivership, following massive losses that have mounted up over the past two years, says a report in the WSJ.

Logistics

Oman Shipping Makes Profit

Oman Shipping Company (OSC) reported a $180 million profit in 2015. Tariq bin Mohammed Al Junaidi, chief executive officer of OSC has been quoted by  Oman News

DP World to Manage Somaliland Port for 30 Years

DP World has reached an agreement to manage the Berbera port in Somaliland, which would allow it to become a major hub for goods to transit to and from the Horn of Africa,

Abu Dhabi Ports Try to Lure Chinese Businessmen

Abu Dhabi Ports - the master developer, operator and manager of ports and Khalifa Industrial Zone in the Emirate - presented the integrated offerings of Khalifa

 
 
Maritime Contracts Maritime Security Naval Architecture Navigation Offshore Oil Salvage Ship Repair Ship Simulators Sonar 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: 0.1108 sec (9 req/sec)