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Sunday, November 18, 2018

Tanker supply post 2010 and chartering practices featured in Sea Asia forum

INTERTANKO's Managing Director, Dr. Peter Swift, participated this week in the Charterers' Forum at Singapore's inaugural Sea Asia conference, organised by Seatrade and/on behalf of the Singapore Maritime Foundation.


Swift discussed the development of the tanker fleet including the IMO MARPOL 2010 single hull phase-out requirements and Europe's and the U.S.'s trading restrictions, applicable in the same year, which would effectively eliminate most single hull tankers from their mainland ports. At the same time, he said, there were provisions in place for many of the remaining single hull and most double bottom or double side vessels to continue to operate in the East until 2015 or until they reached 25 years of age, whichever came first, and subject to the vessel meeting the requirements of the Condition Assessment Scheme. A further element of uncertainty with respect to the future supply pool, he observed, is the number of single hull tankers converting to double hulls, with the count of completed and contracted conversions already well over 120.


He suggested that, with a large order book (currently approximately 40% of the existing fleet), with recycling/demolition at a low point, and despite the forecasted steady rise in tonne-mile demand, the fundamentals pointed towards a growth in the supply-demand ratio in the latter part of this decade.


Turning to current chartering practices, Swift observed that, following the Erika and Prestige accidents, charterers to the EU had demonstrated a growing preference for double hull tonnage, with approximately 90% of all EU imports now carried in this type of vessel. Similarly, he said, for a long time charterers of suezmax tonnage for U.S. ports had shown a strong preference for double hull tonnage and over recent years this was now the case for virtually all sizes of ships. This meant, he said, that apart from panamax sized vessels, single hull tankers were now predominantly being used for trades and ports East of Suez. He emphasised that it would be wrong to conclude that this was any reflection of the quality of the tonnage employed.


A copy of Swift's presentation may be viewed here.


Contact: Peter Swift