Market Report: Tankers

Total number of Tanker orders are down by 26% for 2020 YTD compared to the same period in 2019.

By comparing to 2018 YTD, this year there have been half the number of orders placed. This comes as no surprise as Europe and the US entered the lockdown phase of the pandemic earlier this year, only a month or so after the Chinese industry shut down. However, towards the end of May 2020 orders were placed for both VLCC’s and Suezmaxes by the Greeks, Norwegians and Angolans accounting for USD c.780 mil.

The S&P market has also taken a hit so far this year with sales down 25% compared to 2019 YTD. Although COVID-19 has dampened the number of vessels being transacted, we have seen positively volatile Tanker rates. VLCCs saw highs of USD 260,000 a day in March and but lows of USD 10,000 a day back in February. Figures are now circulating around the USD 30,000 a day mark and seem to have plateaued. The earnings boom occurred after OPEC failed to agree output limits which resulted in a price war. This increased the demand for large tankers due to increased traded volumes and storage and caused positive values for most Tanker types, for a short period of time.

Although the number of sales were down 2020 YTD, the total spent in the second-hand market was up 3% on last year. This can be explained by the high prices being paid on vessels in the crude market where new owners were willing to pay premiums for prompt delivery into the hot market.
Tanker demolition rates have taken a tumble since the beginning of the year with the Indian Sub-Continent closing during the midst of lockdown, this led to few demolition deals being completed. The year started with steel plate prices at USD 425/LDT which have since declined to USD 315/LDT.