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Friday, December 15, 2017

Single-hull exits delayed

The following article appeared in Fairplay Daily News on 1 September.

 

The exit of single-hull tankers, including VLCCs, from trading is going slower than hoped, with knock-on effects on markets, brokers are indicating.


The vessels continue to find employment among charterers, which was reflected by yesterday's busy day in VLCC chartering, said Wilhelm Gedde-Dahl, shipping analyst at Pareto Securities in Oslo.


U.S. tanker broker Charles R Weber said in its weekly report dated 30 August that the pace at which single-hull tankers exit the fleet turned down in 1H10 on rising spot market earnings – even as demolition values were surging in tandem with steel prices. "This was a marked change from the prevailing trend during 2009, when a prolonged slump in rates saw owners of such tonnage become more aggressive in sales of these units for demolition or conversion," Weber said.


"For MR and larger size classes, our estimates as at the start of the year were for some 222 units (or an average of about 19 units per month) to be exited from the trading fleet vis-a-vis demolition or conversion. Year to date, however, the pace has been disappointing: only 115 units have been exited (an average of just over 14 units per month)," he pointed out.


Of the 72 VLCCs Weber saw leaving the trading fleet by this point of 2010, just 26 vessels have done so. With the exception of the MR fleet – in which removals have exceeded expectations – levels among larger tankers have disappointed.


Among MRs, 47 of the predicted 66 single-hull ships have ceased trading.