Tankship Owner Warns of 'Russian Roulette' Market

Press Release
Tuesday, April 16, 2013
Euronav Tankship: Photo courtesy of Euronav

Euronav reports its net loss slipped to US$ 10.7 million in the first three months of 2013, compared with US$ 9.0 million a year earlier.

In its Q1 2013 financial report Euronav makes broad observations on the global tanker market as follows:

The first quarter has seen moderate growth in cargoes comparing 2013 over 2012 and, due to changes in trading pattern, a greater increase in ton-miles. Nevertheless the overall returns for tanker shipping measured in TCE were lower. The supply side of the market remains the fundamental problem. The world fleet continues to increase as the newbuildings contracted up until 2010 are being delivered albeit on a delayed schedule compared to the original contractual delivery dates. More importantly owners of older vessels do not yet scrap them, whereas higher scrapping activity is fundamental to any potential rebound in the market.
 
This oversupply is exacerbated by the market structure. Charterers and their brokers continually pressure owners to accept lower rates to reduce the cost to charterers without a second thought to the return to the owner. The levels reached today are no longer sustainable even for an owner with fully written down assets as net freights often are not enough to pay for basic ship operations let alone longer term maintenance or dry docking. Owners have taken all the measures available to them such as slow steaming and engine retrofitting but the market structure simply absorbs these savings and passes them on to the charterers.

Paddy Rodgers, CEO of Euronav commented: "The risks associated with shipping crude oil have not reduced or gone away but the companies responsible for managing those risks are not being paid sufficiently to take the steps necessary to do so. In any market this will result in the risks going unmanaged. “The market is playing Russian roulette and on one voyage one day one charterer will find out there was a bullet in the gun after all. When that happens, do not call the broker!” commented."
 

 

Maritime Today


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

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

People & Company News

HCI Capital Renamed Ernst Russ AG

A vote was passed at the ordinary shareholders’ meeting of HCI Capital AG yesterday to change the company’s name to Ernst Russ AG. The Executive Board and Supervisory

CMA CGM to use Kingston As Transshipment Hub

French shipping giant CMA CGM plans to use Kingston Container Terminal,  Jamaica as a strategic Caribbean transshipment hub for an enlarged Panama Canal. The Port connects to US East Coast,

Conrad Shipyard Forms LNG Business Unit

Conrad Shipyard has formed a new business unit focused on LNG projects.   Conrad, builder of North America’s first LNG bunker barge scheduled for 2017 delivery,

Tanker Trends

VL-exit?

Earlier this week spot returns in the VLCC market touched their lowest level since October 2014, with TCE earnings for Middle East/Japan (TD3) falling close to $20,

RS Rules Conform to the IMO Goal-based Standards

The rules of the Russian Maritime Register of Shipping are in conformity to the International Maritime Organization (IMO)goal-based standards (GBS), the IMO’s Maritime

Asia Tankers-VLCC Rates to Climb Slowly

Around 47 MidEast charters fixed for July loading so far; older tonnage and new vessels a drag on freight rates. Freight rates for very large crude carriers

Finance

VEB Guarantees $3 Bln of Yamal LNG Debt

Russian development bank VEB said on Friday it had provided a guarantee for $3 billion of debt to the Yamal liquefied natural gas (LNG) project, led by Russian gas firm Novatek.

US Oil Drillers Cut Rigs after 3 Weeks of Additions

U.S. oil drillers cut rigs this week for a 20th week this year after three weeks of additions, according to a closely followed report on Friday, as crude prices

World Stocks Tumble as Britain Votes for EU Exit

Global capital markets reeled on Friday after Britain voted to leave the European Union, with $2 trillion in value wiped from equity bourses worldwide, while money

 
 
Maritime Contracts Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction
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: 0.1040 sec (10 req/sec)