Marine Link
Saturday, December 10, 2016

Seaonal Surges Not Enough To Lift Rates From Depression

Sustained strong oil demand growth is required to lift product tanker freight rates out of their current depressed levels, shipbroker Simpson Spence & Young said in a new report. Temporary seasonal surges could be seen in rates but it would take until the northern hemisphere winter of 2000-2001 before the sector experienced a sustained rise in earnings, SSY said in its latest half yearly World Oil tanker Trends report. "The only factor that can lift the product trade out of the gloom is sustained and strong oil demand growth," SS&Y reported. Positive signs were seen in current global oil demand, SS&Y said, but a bloated vessel orderbook precluded near term recovery.

Tanker Trends

Freight rates for crude tankers loading early April in the Middle East were climbing early last week as shipowners held out for higher prices in expectation of heavy vessel fixing, brokers said. VLCC rates to the U.S. Gulf were expected to rise five or more Worldscale points to W62.5-65 ($10.75 per ton) for the next done fixture, some brokers said. Japan shipment prices were also lifting with the latest bookings at W70 ($7.50 per ton), up from W67.5 in the week before. "We believe this week will be heavy for one reason alone, there will be placement of barrels West to alleviate the shortage that the U.S. market is stressing," broker Marinav Shipping & Trading forecast in its March 13 report.

Tanker Trends: Markets Lose Steam During Asian Holidays

Tanker markets cooled as Asian holidays took the steam out of recent strength, but some brokers saw it starting to simmer again last week. Holidays in Japan and Korea this week coincided with the end of most charterers' May programs, brokers said May 5. Approximately 18 VLCC fixtures of five million tons were reported in the Middle East Gulf, down from 22 of six million tons the week before, according to broker E.A. Gibsons. "However, there was sufficient momentum in the market to maintain rates at their previous levels," Gibsons said. With modern tonnage remaining in tight supply it was reasonable to expect rates to stay at current levels or even improve over the next few weeks, it added.

Tanker Trends

Strong demand for VLCC tankers in the Middle East failed to create a massive breakout in rates, but owners were happy as bunker fuel prices continued to fall, brokers said early last week. Expectations that a lack of modern tonnage would hike rates for mid-April oil major-approved vessels failed to come true. An Exxon cargo for Singapore lifting from three Mideast ports finally got done at the going rate of W77.5 (about $5.00 per ton) after early week offers of W100 had excited dreams W87.5 ($5.50) could be achieved. Other eastern rates held ground or crept up with the average for Japan W77.5 ($8.50 per ton) and W75 ($7.00) for South Korea. Western prices also inched up to around W65 ($11.25 per ton) for the U.S. Gulf while Red Sea fixtures achieved W72.5-75.

DNV GL On Regulatory Developments and Tanker Market

The participants of the DNV GL Tanker Working Group in Hamburg. Photo by DNV GL

DNV GL’s Tanker Working Group looked at the latest trends in the tanker segment with a special focus on the impact of upcoming emissions regulations at its 31st meeting in Hamburg recently. Some 25 representatives from the tanker industry met with DNV GL experts in the classification society’s maritime headquarters to hear presentations and participate in informal discussions. “The Tanker Working Group is a great place for industry representatives and DNV GL to share ideas and the latest news on regulatory developments…

Tanker Operators Brace for OPEC Cuts

© Jose Gil / Adobe Stock

Tanker owners are bracing for a volatile year ahead after enjoying some of the highest charter rates since 2008, with OPEC plans to curb crude output potentially cutting rates by more than 40 percent. Fewer Middle East cargoes will mean lower freight rates for operators of very large crude carriers (VLCC), the biggest tankers in operation, which can carry 2 million barrels of oil and are used mostly by Middle East producers sending supplies to Asia. With average VLCC rates around $45…

Shipping’s Half Year Report – “Must Do Better”

Graph: Clarksons Research

With the spread of challenges facing the industry, it’s unlikely the shipping markets would achieve many top grades, says Clarksons Research. However some sectors might still achieve an “A” for effort and this week’s analysis reviews the markets’ performance in the first half. The Graph compares performance in the first half of 2016 to the averages since the financial crisis, as a barometer of performance against trend. First on the graph is the ClarkSea Index, our average earnings index covering all major sectors, which is 18% down on the average since 2009 and 30% compared to 1H 2015.

Bumpy Ride for Car Carriers

Graph: Clarksons Research

The car carrier sector has been yet another part of the shipping industry to have faced challenging conditions this year, says Clarksons Research. The focus has largely been on demand side difficulties, with growth in global seaborne car trade appearing to have gone into reverse gear. It has been a rather bumpy ride, and today’s car carrier market indicators still seem to be flashing up plenty of warning signals. Growth in global seaborne car trade has struggled to return to the robust levels seen prior to the global economic downturn…

TEN Announces Four New Time Charter Contracts

Photo: Tsakos Energy Navigation Limited

Tsakos Energy Navigation Limited (TEN), a leading diversified tanker owner, has announced new time charter contracts for four vessels, an aframax, two panamaxes, and a handysize product tanker, all to major end users. The average contract length of all four fixtures is 14 months which bring the aggregate fleet gross revenues to a minimum of $1.4 billion. "The new time charters increase TEN's fleet under secured revenue employment to 68%. With seven more vessels delivering in 2017, six of which under long term charters, the coverage will well exceed 70%.

Will Ballast Water Management Regs Trigger Tanker Scrapping?

Graph: Drewry Shipping Consultants Limited

Weakness in freight rates will increase tanker shipping demolitions over the next two years, with the trend accelerating in later years as a result of the IMO regulation on ballast water, according to the latest edition of the Tanker Forecaster, published by global shipping consultancy Drewry. Despite the recent decline in tanker freight rates, demolitions have not yet picked up. Scrapping is expected to increase in the next two years, once owners start feeling the heat of persistent, low freight rates. But as the fleet is relatively young, demolitions will be moderate.

Despite Rising US Production, Saudi Crude Still Flows In

Saudi crude & the US market: Chart courtesy of Poten & Partners

Reported spot market activity from the Arabian Gulf remains on an upward trend since 2010 in spite of rising US crude production, reports Poten & Partners’ in their latest ‘Tanker Opinions’. Over the past few years US domestic crude oil production has supplanted foreign crude oil imports. To the extent that they possibly can, domestic refiners have shifted to local grades that have trended at an often significant price discount. Interestingly, however, fixture activity on the Arabian Gulf to US Gulf trade route remains robust.

Inland Shipping Company Jade Orders Tanker

Inland shipping company Jade ordered a tanker with a loading capacity of 10,000 tons. The inland vessel will be 135 m. long, 20 m. wide, gets a draught of 4.2 m and contains 28 tanks. It will be deployed on the Rhine. So far some six tankers of a comparable large size are ordered or in use, indicating a trend of upscaling of the inland tanker business.

Philly Shipyard Delivers APT Tanker

Courtesy Philly Shipyard

Philly Shipyard, Inc. (PSI), the sole operating subsidiary of Philly Shipyard ASA (Oslo: PHLY), today delivered the American Endurance, the first of four next generation 50,000 dwt product tankers that it is building for American Petroleum Tankers (APT), a subsidiary of Kinder Morgan, Inc. This delivery is the 25th vessel built by PSI (formerly known as Aker Philadelphia Shipyard, Inc.). The next generation 50,000 dwt product tanker is based on a proven Hyundai Mipo Dockyards (HMD) design that also incorporates numerous fuel efficiency features…

Banking Sector Feels The Effects Of Consolidation

The number of major banks involved in the shipping industry has decreased substantially over the last few years. According to Michael Parker, managing director of Citibank, this is just one of many sectors hit by the ongoing consolidation trend in the shipping arena. "Banks can not live on interest margin alone without a substantial rise in spreads. They are having to look for other revenues/fees," said Parker, speaking at the LSE Shipping Finance Conference in London on November 14-15, 2000. Mergers in the banking sector such as Chase and JP Morgan, and Royal Bank of Scotland and NatWest, are illustrative of the fever of consolidation that has also spread into the bulk, P&I, classification, ports and e-commerce sectors.

New Building Price Dynamics Low On Impact

Graph: Clarksons Research

Newbuilding prices have fallen fairly consistently since the end of 2014, and this trend has continued in recent months, says Clarksons Research. Cutting newbuild prices can be an effective way for yards to stimulate new orders, but this is not always the case. A range of factors have dampened the impact of falling prices in 2016 so far, whilst other constraints may have limited the extent of the cuts seen. In recent times, the combination of weak demand for newbuildings and excess…

Tanker Orders Will Not Be Cancelled

According to a report from Emirates Business 24/7, existing new-build programs in the tanker sector of the shipping industry are expected to go ahead with no fear of cancellations despite the current slowdown in the industry's performance, said a senior executive. While ship orders in other sectors have suffered from unprecedented cancellations due to financial constraints, the relatively stronger position of the tanker sector has helped to prevent a similar trend. (Source: Emirates Business 24/7)

Glimpses of AIS Trends in the PortVision 2014 Crystal Ball

AIS Display: Image Wiki CCL

Houston, Texas-based PortVision, a leading provider of business intelligence solutions for the maritime industry, shares its projections for the top vessel-tracking trends that it believes will have the greatest impact on the maritime industry during 2014. Trend #1: Improving real-time visibility and decision-making. Advances in AIS-based vessel-tracking tools and technology that move the industry beyond simple “points on a map” to on-demand and immediately actionable business insights and intelligence. Trend #2: Improving marine terminal efficiencies.

MISC Sees Growth Opportunities

Amidst fears of a tanker glut, MISC Bhd sees growth opportunities in the tanker business. President and chief executive officer Datuk Shamsul Azhar Abbas said shipping was a cyclical business and industry players recognized that there would be opportunities to expand during a downturn. An increase in oil prices, a number of new tankers transporting crude oil and increasing size of oil tankers fleet worldwide had raised concerns among the shipping fraternity of a potential tanker glut. It was reported that the size of the oil tanker fleet expanded 3.8% this year, overwhelming the 1.7% growth in in crude oil demand estimated by the International Energy Agency.

Tanker Euphoria Drives Ratings Bump

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. In a pair of separate corporate profiles released June 29, Lazard & Freres’ James L. 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.

Verifavia Performs Audit for Dynacom

Photo: Verifavia Shipping

Verifavia, the world’s leading emissions verification company for the transport sector (aviation and shipping), has commenced a ‘pre-verification GAP-Analysis’ audit for Greek-based Dynacom Tankers Management Ltd. (Dynacom). The tanker operator is taking proactive steps to meeting the requirements of the EU’s Monitoring, Reporting and Verification (MRV) Regulation (2015/757), which came into force on 1st July 2015. The regulation is the industry’s first step towards cutting CO2 emissions from maritime transport in the European Union (EU).

Shipping industry market trends for 2014 - John Nikolaou

John Nikolaou

Greek shipowners have returned to the top of the global shipping economy by controlling a gross tonnage of 164 million tons, overtaking the Japanese on 159.4 million tons. According to Clarksons, this global lead illustrates that Greeks operate much bigger ships because they own 4,984 vessels against 8,537 managed by the Japanese and 6,427 by the Chinese. Japanese have invested huge funds during the past decade which resulted in significant losses during the crisis, while Greeks proved to be more conservative during the period of industry growth and had less negative impact on them.

D’Amico Sees Q1 Net Profit of $11.4Mln

Image: D'Amico International Shipping

Italy-listed D'Amico International Shipping (DIS) made a net profit of $11.4m in the first quarter, reversing its net loss of $6.8m last year, as the product tanker freight market improved. The board of the product tanker owner on Wednesday approved first quarter 2015 results of base time charter revenues (TCE) of $77 million. "Our company has achieved net profits of $11.4 million thanks to a fast-growing tanker market," said CEO Marco Fiori. "The tanker market has improved significantly in the first quarter of 2015…

Frontline Sees Limited Effect on Demand From 'Balanced' OPEC Cut


Maritime Reporter Magazine Cover Nov 2016 - Workboat Edition

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