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 Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Gondan to Build Spanish Patrol Boats

Gondan Shipyard has recently signed a contract with the Guardia Civil, Spain’s Civil Guard, for the building of two patrol boats. The aluminum and fiber (PRFV ) vessels will measure 20.

ABS to Class the World's First CNG Ship

ABS announced it has been chosen to class the world's first compressed natural gas (CNG) carrier ordered by Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia's

Interview: Roberto Cazzulo Talks Class Trends

As Roberto P. Cazzulo, RINA, steps down as the Chairman of the IACS Council, Maritime Reporter caught up with him to discuss the current state and future direction of global class.

Tanker Trends

Marseilles Fos Reports Mixed First Half

First-half container traffic at leading French port Marseilles Fos totalled 583,287 teu – up 7% on the first six months last year - marked by a 10% increase at the deepsea Fos terminals.

ABS to Class the World's First CNG Ship

ABS announced it has been chosen to class the world's first compressed natural gas (CNG) carrier ordered by Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia's

Prelude By the Numbers

Out at sea, look! It’s a ship! It’s a floating rig! It’s SuperFLNG! While not “faster than a speeding bullet,” Shell’s shipzilla Prelude is certainly more powerful than a speeding locomotive,

Finance

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

Cummins Reports Revenue Jump in Q2 2014

Cummins Inc. reported its results for the second quarter of 2014. According to the report, second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013.

GPA Sets Tonnage Record

The Georgia Ports Authority moved more than 29 million tons of cargo, 3 million twenty-foot equivalent container units (TEUs) and more than 700,000 auto and machinery units in Fiscal Year 2014.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Port Authority Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1677 sec (6 req/sec)