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Thursday, December 14, 2017

Suezmax trades – 283 m dwt in 1H04 – Source Fearnleys

There are many suezmax trades - the above graph shows the largest ones. The Intra North Sea trade of some 59 million deadweight (m dwt) (of which 8 m dwt was DB tankers) represented some 21% of the total market; the trade North Africa-Mediterranean of 24 m dwt and the trade Black Sea to Mediterranean of 22 m dwt both represented some 8% of the total market; the West Africa to North America trade of some 20 m dwt represented some 7%. The biggest single-hull trades of some size were trades North Africa - Mediterranean and Persian Gulf - Asia where the single hull part represented some 29% and 55% respectively of these trades. The same geographical aframax trades were also the biggest single hull trades in the aframax sector.

According to Fearnleys, the total size of the suezmax trade of 283 m dwt (the first half of 2004) was about 53% of the total size of the VLCC trade. The total suezmax trade in 2003 was 556 m dwt. Assuming that the trade during the second half of 2004 will be the same size as the first half, trade in 2004 will be some 1.6% greater than in 2003. In fact there is some indication that the activity in the second half of 2004 has been higher than in the first part.

On average 8.8 suezmaxes transited monthly the Suez Canal Northbound in 2003, up from 5.5 in 2002. The average until October this year has been 10.5 suezmax transits per month.

We have recorded 18 period contracts for suezmaxes so far in 2004, ranging from half-a-year to 7 years at USD 25,000 per day up to USD 56,500 per day. The last one was a one-year contract for Tesoro reported by Clarkson mid-November and is the highest rate we have recorded for any period contract.

Suezmax newbuilding prices have increased from USD 44 m in 2003 to USD 70 m today and another USD 5 m has to be added for a 5 year-old 150,000 dwt tanker.

Increased exports from Russia and neighbouring countries may benefit the suezmax market. Full recovery of Iraqi exports from Ceyhan is another potential booster for this segment. Next year oil through a new pipeline from Baku will also be exported from Ceyhan. The capacity of this pipeline is 1 mbd, but initial volumes moved will be around 0.3 mbd.

The downside for the suezmax market is the newbuilding deliveries of 26/25/28 ships in 2005/2006/2007 compared to phase out of 3/4/4 suezmaxes, or an increase of 7-8% yearly in dwt terms. Sales for decommissioning will be dampened by continued low phase-out also for the next three years (3 ships per year), is the forecast.

Suezmaxes – the youngest tanker segment

Johan G. Olsen has issued its latest suezmax fleet list, which not only records the ships but also the employment of the ships and the respective charterers. The publication lists 330 existing ships [129 double hull (DH)/79 single hull (SH), 24 double bottom (DB)/double side (DS)] (including 17 OBOs) plus 79 newbuildings.

Oil majors or state-owned companies own 83 (25%) of the existing suezmaxes and 17 (21%) of the orderbook. In addition they control 5 tankers which are on long contract to 2006 and beyond. The other 75% of the suezmax fleet are owned by independent owners. The independent owners have 62 suezmaxes on order (79% of the total), 5 of which are fixed for 2006 and beyond.

The four oil majors, BPAmoco, ChevronTexaco, ExxonMobil and Shell Tokyo Tankers, have a combined fleet of 14 suezmaxes, plus 8 on period charter until 2006 or later. ChevronTexaco alone has 6 suezmaxes, the largest single oil company fleet.

The biggest suezmax owner is Frontline with 29 suezmaxes, 8 of which are DH plus 2 DS/DB. The 2nd biggest suezmax owner is Teekay (which is also the biggest aframax owner, including Teekay Norway and Teekay Spain) with 25 suezmaxes, 24 of which are DH – and 12 are on time charter (TC) until 2006 or longer. General Maritime is the 3rd biggest suezmax owner (also the 3rd biggest aframax owner) with 17 tankers in this segment, 7 of which are DH, 6 DB/DS plus four newbuildings.

Altogether there are 6 owners with 10 suezmaxes or more and another 12 with 5-9 suezmaxes each. The 6 owners with 10 tankers or more have a 32% market share and the 18 owners with 5 tankers or more have a 57% market share. The remaining 143 suezmaxes are split between some 77 owners.

The average age of the suezmax fleet (excluding OBOs) is 8.7 years. 17 (5%) were built in the 1970s (including 3 storage), 37 (12%) in the 1980s (including 1 storage), 143 (46%) in the 1990s, and 116 (37%) in this decade, the orderbook is some 24% of the fleet. There are some 79 SH and 24 DB/DS suezmaxes left, which means that about 69% of the suezmax fleet is DH, 7% DB/DS, and only 24% SH.

Looking at the phase-out of suezmaxes, 8 of the trading ships have already been denied access to the U.S. (except dedicated lightering areas and LOOP), 3 of the remaining tankers have been denied access to European Union waters as from 2004, only 1 is due for phase-out this year and 3 next year, according to MARPOL.

The phase-out schedule according to our information is:
(there is some uncertainty with regard to the PL/SBT status of some of the tankers.)

 

120-199,999

Year

MARPOL*

 EU

 OPA90

2003

0

3

7

2004

1

1

2

2005

3

 

3

2006

4

4

4

2007

4

4

4

2008

3

3

1

2009

3

3

 

2010

3

46

43

2011

0

0

 

2012

2

0

 

2013

5

3

 

2014

11

4

 

2015

40

8

15

Total

79

79

79

*MARPOL subject to administrations. So far Singapore and Japan have declared the option to allow SH tankers after 2010 until 25 years of age until 2015.

We have recorded 7 suezmaxes sold for decommissioning so far in 2004 plus 4 suezmax OBOs and one FSO (floating storage and offtake) of 140,000 dwt. The age of vessels sold has ranged from 21 to 30 years: 9 were older than 25 years. The average age of the suezmaxes sold for decommissioning was 26.7 years.

Contact: Erik Ranheim