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Thursday, December 14, 2017

Record tanker prices and tanker ordering

Following last week's report on tanker ordering, we have now taken a closer look at the figures. It would appear that tanker prices are increasing and that tanker ordering is at a record high. This means that the financial investment in tankers in 2006 will also hit a record high.

 

 Investments million USD

m USD

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Aug-06

VLCCs

0.3

1.6

4.0

2.1

1.7

4.1

1.6

1.0

3.4

4.0

4.1

7.9

Suezmaxes

0.6

0.9

1.5

0.8

0.3

2.2

0.9

0.7

2.4

1.7

0.5

1.3

Aframaxes

0.7

1.2

2.1

1.1

0.3

2.1

2.8

1.6

3.8

3.4

2.8

4.2

Panamax

0.0

0.0

0.4

0.5

0.1

0.2

0.8

1.2

2.9

2.4

1.4

1.8

Handy

2.0

3.0

3.5

1.6

1.6

3.5

4.3

4.1

8.0

11.8

12.9

11.7

Total

3.6

6.7

11.5

6.1

4

12.1

10.4

8.6

20.5

23.3

21.7

26.9

 

 Investments million dwt

 m dwt

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Aug-06

VLCCs

1.6

5.9

15.9

9.0

7.6

17.0

6.8

4.6

15.0

13.1

10.0

19.6

Suezmaxes

2.0

2.5

4.7

3.1

1.1

7.2

2.8

2.3

7.9

4.5

1.1

2.6

Aframaxes

2.0

3.4

6.5

3.4

1.0

5.8

7.4

5.2

10.8

7.3

4.9

7.6

Panamaxes

0.1

0.1

1.1

1.2

0.3

0.5

1.6

3.0

6.1

4.1

1.9

2.6

Handy

1.7

3.2

4.1

2.0

1.1

2.8

4.3

3.3

6.8

6.6

6.9

7.2

Total

7.4

15.1

32.3

18.7

12.1

34.6

24.2

20.5

49.4

38.9

27.1

41.9

 

 Tanker prices - million USD

 m USD

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Aug-06

VLCCs

85

82

83

72.5

69.0

76.5

70.0

63.5

77.0

110.0

122.5

129

Suezmaxes

54

51

52

44

42.5

52.5

46.5

43.8

51.5

71.0

72.5

80

Aframaxes

43.5

40.5

41

34.5

33.0

41.5

36.0

34.8

41.5

59.0

59.5

65

Panamaxes

 

37

37

31

31.0

36.0

32.0

31.3

37.5

48.5

50.5

56

Handy

33.5

31.5

31.5

26

26.0

29.5

26.3

27.0

31.5

40.0

43.5

46.5

Based on figures from Clarkson

 

The tables show that investments until August this year have reached 26.9 billion dollars or some seven times the investments in 1995 and 1999. Contracting in 2003 was higher in dwt but some 30% lower in dollar terms. Contracting this year, if the current momentum is maintained, could easily exceed 50 m dwt (14% of current fleet). The all-time high was in 1973, when 105 m dwt of tankers (56% of current fleet) was contracted, and the second highest in 1972 when 50.5 m dwt of tankers was contracted.

 

The orderbook is now some 115 m dwt (not including chemical tankers), which is about a third of the current fleet. The tanker fleet to be phased out is some 96 m dwt, of which some 13 m dwt are double-sided or double-bottomed tankers that will be phased out after 2010. The orders placed so far for delivery in 2010 amount to less than 9 m dwt, which means room in the shipyards for at least another 30 m dwt of tankers with 2010 delivery (orders for delivery in 2009 total some 37 m dwt).

 

The three owners with the largest orderbooks (ordering in September not included), according the September Clarkson Shipyard Monitor, are:

 

Owner

dwt

No

National Iranian Tanker Company

4,607,000

17

Cido Shipping

4,255,900

53

A.P. Moller

3,582,550

22

 

Some 70 yards are building tankers, the largest being:

 

Builder.

dwt

No

Hyundai H.I.

14,169,760

76

Daewoo S.B.

8,445,670

33

Dalian Shipbld. Ind.

7,791,050

47

Universal S.B.

7,014,700

31

Samsung S.B.

6,004,000

44

STX Shipbuild.

5,544,500

93

New Century S/Y

5,375,200

62

Hyundai Samho

5,125,000

23

Hyundai Mipo

4,987,480

112

 

 

Considering that we currently have virtually full capacity utilisation in the tanker market, and assuming a 3% increase in demand, 45 m dwt of newbuildings will be needed in the next four years. It must be assumed that at least some of the single hull tankers will trade beyond 2010, as there are provisions in the regulations allowing for this. This means that the tonnage balance in the medium term looks rather positive.

 

However, one important point is that less than 18 m dwt of tankers are due for phase-out before 2010 whereas delivery in this period will amount to 102 m dwt. This probably means a surplus of tankers in the short term. The table below shows the orderbook by year of delivery, the phase-out by year and the net result when deducting phase-out from deliveries.

 

Deliveries, phase-out and net result

 

 

Deliveries – number tankers

Size cat

2006

2007

2008

2009

2010

Total

10,000-53,000

72

161

156

95

28

512

60,000-76,000

23

47

36

38

5

149

105,000-116,000

19

50

53

70

5

197

150,000-185,000

6

26

16

37

1

86

280,000-320,000

7

36

39

52

22

156

 Total

127

320

300

292

61

1,100

 

Phase-out– number tankers

Size cat

2006

2007

2008

2009

2010

Total

10-59,999

26

55

56

38

203

378

Panamax

 

10

10

12

41

73

Aframax

1

23

5

6

79

114

Suezmax

1

1

2

3

46

53

VLCC

 

1

1

3

150

155

Total

57

131

93

75

688

1,044

 

Deliveries –Phase-out- number tankers

Net total

Size cat

2006

2007

2008

2009

2010

10-59,999

46

106

100

57

-175

134

Panamax

23

37

26

26

-36

76

Aframax

18

27

48

64

-74

83

Suezmax

5

25

14

34

-45

33

VLCC

7

35

38

49

-128

1

Total

70

189

207

217

-627

56

 

(The INTERTANKO phase-out database also contains 132 tankers 10,000-29,999 dwt and 8 panamaxes that should have been phased out before 2006, but these may either be in domestic trades, or have been converted, or be being used in non-petroleum trades (only an option until 1.1.07) or they may have been removed from petroleum trades in other ways).

 

Contact: Erik Ranheim