contracts & completions
An order drought will revive the market
A lack of new orders is the route to better market equilibrium. Statistics for the year to date continue to strengthen this argument
by Barry Luthwaite C
ontracting of newbuilding tankers over the last couple of months has been intermittent, at best, as most
owners reconcile themselves to the present challenging trading circumstances. There is hard evidence of contract changes, layup enquiries, deferred deliveries and cancellations. While these are small scale at the moment, it is difficult to see how else many owners can ease cashflow problems. Crude in particular is suffering, with charter rates that hardly cover operating costs even on slow steaming.
vessel type Aframax
Handymax Suezmax
Medium Chemical Medium Products Panamax
Small Chemical Small Products Suezmax VLCC total
TANKERS DELIVERED DURING 2011 no 36 50 19 20 5
17 10 4
35 47
243 dwt
4,031,772 2,394,923 623,442 324,596 82,768
1,227,988 61,854 20,740
5,433,452 14,476,565 28,678,100
vessel type Aframax
Handymax Handysize
Medium Chemical Medium Products Panamax
Small Chemical Small Products Suezmax VLCC total
www.tankershipping.com
TANKERS CONTRACTED 2011 no 18 23 8 8
15 5 9
62 10 10
168 The contracting total for the year so far in
2011 moved up to 168 aggregating slightly over 9.85 million dwt. Thirty-eight tankers were ordered over the last two months. This compares with a delivery total so far this year of 243 tankers adding slightly over 28.6 million dwt to the global fleet. A dearth of large vessel contracting will
help improve the supply-demand balance. The highest scrap total for seven years has been achieved this year as 127 vessels, aggregating almost 9.7 million dwt, have so far been removed from the global fleet. The industry is still facing a plethora of
deliveries from orders placed in the boom years. The ratio of 2011 deliveries versus disposals 243/127 has dipped below 2:1 for the first time, but is still too high. If this reached parity it would give real hope. An examination
country of shipbuilder Korea (South) China Japan
Russian Federation Brazil
Turkey
Indonesia Vietnam Romania USA
Croatia dwt
1,998,080 1,162,200 222,600 156,800 764,400 375,918 49,105
378,799
1,550,000 3,195,000 9,852,902
Philippines Bangladesh Iran Italy
India
Argentina Bulgaria Estonia
Germany Pakistan Portugal Taiwan Greece
United Kingdom total
TANKERS ON ORDER no
587 468 113 100 65 60 27 21 18 15 11 10 9 9 8 6 4 2 2 2 2 2 2 1 1
dwt
64,060,057 41,599,208 8,098,447 1,891,475 5,208,500 594,900 230,300
1,247,400 521,500 753,528 284,702
1,515,420 19,300
679,000 87,600
120,000 188,000 10,000 9,000
44,000 3,200
54,000 54,500 13,400 1,305
1,545 127,288,742
of 2011 statistics is interesting since here the respective figures for contracting versus recycling are 168/127. Deadweight capacity is almost at parity, underlining disposal of so many larger tankers. A closer examination of actual vessel types
gives a truer picture of today’s contracting picture. There are signs of improvement in some trading sectors but owners cannot be certain how long spot rates will yield a profit on voyages in a volatile market. Having suffered a drought in newbuilding
country of shipowner Greece China
Singapore Turkey Japan
Russian Federation USA Italy
Germany Brazil
United Kingdom Norway
Korea (South) Iran
Denmark Venezuela
Undisclosed Hong Kong Indonesia
United Arab Emirates Netherlands Saudi Arabia Malaysia Sweden Taiwan Kuwait
Vietnam Canada India
Romania Other total
TANKERS ON ORDER no
236 140 107 106 68 68 62 58 57 55 47 46 43 40 38 34 33 31 28 28 21 19 14 14 14 13 11 10 10
10 84
dwt
25,273,921 12,734,582 8,071,880 5,851,139 4,804,907 2,646,385 5,292,080 2,875,435 1,805,800 4,554,500 3,334,360 4,484,884 5,173,110 6,531,800 3,061,597 2,733,120 1,802,350 3,488,623 581,200
5,417,900 1,209,000 1,622,000 172,800
1,079,400 3,280,300 989,761
1,098,000 766,000
1,831,348 464,800
4,255,760 1,545 127,288,742 Tanker Shipping & Trade I October/November 2011 I 9
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