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Tuesday, October 23, 2018

Phase-out – end of story?

We have received information indicating that most of the aframax tankers built before 1982 have been converted to PL/SBT, and that only a handful are left for phase-out by 2005. In view of the recent good tanker market, it is likely that many other tankers have also been converted to PL/SBT. This means that the phase-out dates for these tankers will be mainly 2006-2007, currently a quiet time for phase-out.

The few old VLCCs and suezmaxes left appear mainly to be used for storage and therefore these tankers have no market impact. In reality this means that the phase-out requirements are likely to have virtually no market impact before 2010. The phase-out that year will depend on whether administrations will allow SH tankers to trade until they are 25 years old. DB/DS tankers can trade after 2010 until they are 25 years old.

Between 7.9 (150 tankers) and 66.6 million dwt (703 tankers) have to be phased out in 2010 - the first figure if a significant number of port and flag administrations allow trading of single hull tankers after 2010 (until maximum 25 years old), the second figure if the world follows the EU policy of denying trading to single hull tankers after 2010. The EU–MARPOL range is:

  •  6 - 153 VLCCs (min – max)
  •  3 – 46 suezmaxes
  • 21 - 86 aframaxes
  • 22 - 44 panamaxes
  • 39 - 94 tankers 20-49,999 dwt
  • 59 - 280 tankers 5-19,999 dwt

This gives a total of 109 million dwt of single hull tankers including 17m dwt of DB/DS tankers.

Some 31.5m dwt are due for phase-out between now and 2009, giving an average of just over 6m dwt per year, which would not generate more than normal scrapping and replacement of tonnage.