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

People & Company News

First Women's Expedition to the Arctic

Company "MyArctic-expeditions" organize the first women's expedition to the Arctic Ocean. The expedition will start on March 5 in the capital of the Nenets Autonomous

Topaz Responder Saves Refugee Migrants

Topaz Energy and Marine has emerged as an unlikely player in the effort to save refugee migrants risking their lives on the sea crossing from Turkey to Greece’s islands in order to reach Europe.

MHI's Entity to Oversee Material Handling Equipment, Engine and Turbocharger Businesses

Today Mitsubishi Heavy Industries, Ltd. (MHI) decided in principle to launch a new wholly owned entity to integrally oversee its current businesses in material

Tanker Trends

Crowley Christens 2nd LNG-ready Product Tanker

Crowley christens second of four newly built, LNG-ready product tankers for use in U.S. coastwise trade   Crowley Maritime Corp. has christened the second of

Canada Says Lifting Some Sanctions Against Iran

The Canadian government said on Friday it was lifting some sanctions against Iran, including the broad ban on financial services, imports and exports, making Canadian

Glencore to Lift Iranian Fuel Oil at Bandar Mahshahr

Anglo-Swiss commodity trader Glencore has chartered a ship to load Iranian fuel oil at the Iranian port of Bandar Mahshahr in a move that signals the return of

Finance

Sardines Boost Murmansk Port Turnover

In January 2016 turnover of the Murmansk Marine Fishing Port reached 22 thousand tons of cargo, including 15 thousand tons of fish. This is higher than last year,

COSCO Plans European Transhipment Hub

China's COSCO is forging ahead with a plan to build a European transhipment hub, reports Reuters. The state owned shipping giant is expected to make an offer for

MISC Bhd: Revenue Up

Malaysia International Shipping Corporation Berhad (MISC Berhad), a shipping arm of Petronas, has seen an increase of 12.3 percent in its net profit for the 2015

 
 
Maritime Security Naval Architecture Navigation Offshore Oil Port Authority Salvage Ship Electronics 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: 0.1061 sec (9 req/sec)