Tanker newbuilding ordering activity has been a rather mixed picture during this year and especially during the summer months, compared to last year’s data. Similarly, trends are different than last year in both the clean and the dirty markets. According to the latest report from shipbroker Gibson, of the 124 tanker orders (25,000dwt+) recorded so far this year, 39% (49 orders) have been placed by Greek interests accounting for 42% of the tonnage. Interestingly, US investors account for 11 orders or 2.7 million dwt (14%) of this year’s placing, which consisted of 8 VLCCs, 2 Suezmaxes and a single Jones Act product carrier. Norwegian ‘listed’ companies account for another 8 VLLC orders.
According to the London-based shipbroker noted though that we are only halfway through August and newbuilding prices are forecast to continue to soften. A slowdown of ordering in any of the tanker sectors will be very welcome, particularly with such a high delivery profile projected for next year. However, the lure of lower newbuilding prices and the anticipated winter spike may once again entice more speculative ordering, putting at risk the prospect of higher earnings going forward.
Gibson’s report added that “August is not usually a month when you would expect to see a large volume of orders placed. However, August 2013 broke tradition with a deluge of tanker orders at the start of a period of rising construction prices. Last August saw 10 orders placed for VLCCs a amounting to 3.1 million dwt with a further 2.5 million dwt invested on LR2 and MRs as newbuilding prices continued to march upwards before easing this summer. It has been apparent for some time that sentiment has very much swung in favour of the crude tanker sector as some investors get nervous about the size of the product tanker orderbook. The ordering profile this year shows a very different picture. This week’s announcement that Tsakos Energy has ordered 2 (+2 options) LR1s will be the first contract placed for clean product tonnage since June. Orders for product tankers have been considerablly more subdued since January and well below last year’s levels. In complete contrast July orders for crude tonnage amounted to the 3.6 million, the highest monthly total since the 4.9 million dwt ordered last November when earnings spiked”.
The shipbroker also stated that “contracts announced this July included 7 VLCCs and 8 Suezmaxes, with a further 2 Suezmaxes placed this month. This takes the orderbook to 26
Suezmaxes in the first 8 months of this year which represents 56% of the total orderbook, following just 19 Suezmaax orders placed between 2011 and 2013. Shipyard resale values for the clean products carriers have fallen below newbuilding prices in all the clean size ranges, indicating that some owners may be looking for an exit strategy as their nerve gets seriously tested. In contrast, VLCC and Suezmax resales continue to ‘flag up’ higher than newbuilding prices despite the recent fall in asset values across all sectors”, Gibson concluded.
Meanwhile, in the crude tanker markets this week, in the Middle East, Gibson said that “a firmer feel that stirred last week was not tempered this week on the VLCCs as charterers couldn’t help themselves from moving into their September programme in the hope of not being the next one to pay up! Invariably, all this did was further exasperate the firm feeling amongst the owning fraternity and rates going East finished the week 10 points higher at 270 x ws 56.5 to go East and an untested 280 x ws 29 going West. Suezmaxes can only dream of a similar set of circumstances as the tonnage list here has remained well-stocked leaving owners with little wrigle room to move from the low levels of 140 x ws 35 going West and 130 x ws 70 East. Aframaxes have had a relatively muted week in the office and this has allowed charterers to chip away at the rates finishing at 80 x ws 115 for AG/East”, Gibson noted.
