Tankship Oversupply May be Moderating: Analyst

By George Backwell
Monday, August 18, 2014
Current orderbook for tankers, 30,000 dwt & larger: Image courtesy of Poten & Partners

Slip...N’ Slide into better times but watch the rocks and grit says Poten & Partners of the global tanker order book in their latest 'Tanker Opinions'; but any rapid influx of tanker tonnage could seriously hinder the upside in earnings for the longer-term.

Although the Caribbean market for Aframaxes has taken a precipitous tumble this week, other tanker segments have maintained healthy spot rates suggesting that vessel oversupply could be moderating in the general sense.

A look at the current orderbook across all segments provides some insight as to what is still coming down the pike, but more curiously what has slipped or has fallen off the radar all together. Since ordering momentum continues, due in large part to a feeling that the market is coming off of cycle lows, the threat of vessel oversupply looms. However, the uptick in ton-mile demand could offset the incremental new tonnage supply in the near term.

The current orderbook for tankers, 30,000 deadweight and larger, is 66.1 million deadweight tons (mDWT) through 2017, (see Fig. 1 pictured here). What is the most interesting about these statistics, however, is not the incremental capacity that has been ordered this year, but that the reported new orders do not account for the differential between the January 2014 orderbook and that of today.

At the start of the year, the 2014 orderbook was 27.2 mDWT, the current orderbook is 15.9 mDWT and only 8.1 mDWT has reportedly delivered. This differential suggests that 3.3 mDWT, or 12%, of the originally reported orderbook is on a surface level unaccounted for.

The likely explanation is that these vessels have simply slipped into later years. Looking at the year-to-date delivery pace, this could explain for the majority of that differential. The bulk of the orderbook, 41% is made up of VLCC tonnage, the majority of which is currently slated to deliver in 2016.

As of the beginning of August 2014,, 11 VLCCs have been delivered of an initially expected 36. At this rate, the total deliveries for full year 2014 will be 20 vessels; 16 VLCCs have slipped forward, or been renegotiated and or cancelled.

On a sector-by-sector basis, a thorough review of credit risk from the shipowner and shipyard perspective can help to hone the view on the actual new supply expected. For example, speculation surrounding the ultimate deliverability of the Suezmax orderbook is a function of both shipyard capability and orderer of record.

Some schools of thought believe that the Suezmax orderbook is realistically only 55% of the 62 vessels reportedly on order, suggesting that widely reported orderbook numbers grossly overstate the reality of new tonnage supply in the next few years.

While shipyard statistics is sometimes a pseudoscience, shipowners are still cautioned not to over-do the ordering in the grander sense. Although, for many, it is still difficult to forget the glut of tonnage that has largely plagued the market for most of the past decade, group-think is a powerful force.

Today’s freight environment suggests the faint hope of light at the end of the tunnel, but any rapid influx of tonnage could seriously hinder the upside in earnings for the longer-term.

Source: Poten & Partners


People & Company News

MPA Appoints Koji Sekimizu as Distinguished Visiting Fellow

The S. Rajaratnam School of International Studies (RSIS) and the Maritime and Port Authority of Singapore (MPA) have appointed former Secretary-General of the

MN100: Klüber Lubrication NA LP

The Company: Klüber Lubrication is one of the world’s leading manufacturers of specialty lubricants, offering high-end tribological solutions to virtually all industries and markets worldwide.

Grand Bahama Shipyard Adds Four Executives

Grand Bahama Shipyard Limited (GBSL), a Caribbean shipyard providing retrofit, refurbishment and revitalization to cruise and commercial vessels, has added four

Contracts

Nakilat Upgrades VSAT Service for LNG/LPG Fleet

Nakilat, the shipping arm of Qatar’s liquefied natural gas sector, has entered into a contract with Global Eagle Entertainment Inc.’s Emerging Markets Communications

Fred.Olsen Energy, Hyundai Settle Rig Dispute

Rig firm Fred. Olsen Energy and South Korean yard Hyundai Heavy Industries settle dispute over construction of semi-submersible rig Bollsta Dolphin. Shares in Fred.

NordLB to Shed Shipping Loans to KKR

German state-owned lender NordLB and KKR Credit said they had reached an agreement by which KKR Credit will acquire a $1.5 billion portfolio of shipping loans from

Shipbuilding

Tough Twins: New Fireboats for Port of Long Beach

Canada based naval architect and marine engineering firm Robert Allan Ltd. is a leading designer of high-performance response vessels of many types and in particular,

IWSA to Host Wind Propulsion Forum at SMM

The International Windship Association (IWSA) will host its annual Wind Propulsion Innovation Forum at SMM2016 in Hamburg, including an extensive agenda with expert

Bollinger Delivers 19th FRC to the USCG

Bollinger Shipyards has delivered the 19th Fast Response Cutter (FRC), USCGC Rollin Fritch, to the U.S. Coast Guard.   The 154-foot patrol craft USCGC Rollin

Tanker Trends

Big Tankers' Need for Retrofit Slows Use of New Panama Canal

The promise that some oil traders and brokers saw for an expanded Panama Canal to become a new route for large tankers will take longer to realize than expected

Pressure Mounting on VLGCs Rates - Drewry

A wave of cargo cancellations from the US is putting additional pressure on VLGC rates, according to the latest edition of the LPG Forecaster, published by global shipping consultancy Drewry.

Russian Tanker Detained in Malaysia

The Malaysian Maritime Enforcement Agency (MMEA) detained a Russian oil tanker Zolotoi Most along with 25 crew members for anchoring off Tanjung Piai without authorization,

Finance

European Owners Lead in Buying Up Secondhand Tonnage

With European owners leading the pack in buying up vessels, the sale and purchase market appears to have been notably active in recent years, reveals Clarkson Research Services Limited.

Monjasa Bags Credit Facility from Société Générale

Danish bunker fuel supplier and shipping firm Monjasa has signed a credit facility with French bank Société Générale for USD 80 million.    A statement from

Hanjin Shipping to Submit Self-Rescue Plan

South Korea’s Hanjin Shipping is planning on submitting a self-rescue plan to creditors this week to stave off bankruptcy by Aug. 25, reports Korea Herald quoting local media.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Sonar
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: 0.2419 sec (4 req/sec)