In Hellenic Shipping News 31/03/2015
Despite the fact that the ice class season during 2014/2015 in North West Europe is nearly over, ship owners have enjoyed a healthy market during the past few months. According to the latest weekly report from shipbroker Gibson, “Baltic ice conditions are usually most severe in March/April, however this year, mild weather means that the ice has already started to break and restrictions have been eased. A relatively “premature” conclusion of the ice season limited earnings potential, as this period is traditionally the time when owners reap the rewards for the extra investment in ice class specs and higher bunker consumption”, said the shipbroker.
However, according to Gibson, “crude tanker earnings in general both for ice and non-ice class have moved to higher levels since last year. Also, owners of tonnage operating in the Baltic Sea earned a healthy premium in January 2015. During the period average spot tce earnings for Aframaxes trading Baltic-UK Cont were some $27,000/day higher than for Aframaxes trading across the UK Cont, the highest premium in nearly two years”.
Gibson added that “going forward there are indicators both in favour and against ice class tankers. On the downside, perhaps one of the most worrying factors is the recent decline in the FSU crude exports in the West. FSU crude exports in the Baltic averaged just under 1.3 million b/d last year, down by 0.27 million b/d from 2013 levels and down by 0.35 million b/d compared to 2012. This drop has been driven by expanding pipeline infrastructure to the East and growing/upgrading refining capacity in Russia. The declining trend in the Baltic FSU crude exports is likely to continue taking into account plans underway to expand further pipeline links to the East, growing emphasis of the Russian Federation to increase trade ties with Asia Pacific and international sanctions that have the potential to curb Russian crude production in the short to medium term” the London-based shipbroker concluded.
The report added that “on the upside, the rapid growth in the ice class supply seen between 2000 and 2010 has come to a complete halt. At present, there are no orders in the Suezmax, Aframax/LR2 and LR1 sectors and just three Panamaxes on order all due for delivery in 2016. In terms of future scrapping activity of ice class tankers capable of carrying crude (55,000 to 160,000 dwt) the picture is mixed. The near term demolition prospects are limited as there are just a few units over 20 years of age. However, the lack of fresh orders indicates that supply will remain flat in the next few years. Beyond 2016/17, demolition activity is likely to start increasing, as the population of “aging” ice class tankers gets bigger. At present, out of the 167 ice class fleet (55,000 to 160,000 dwt), 16 tankers (10%) are over 15 years of age, most notably in the Suezmax segment. However, what impact this will have on the overall fleet size remains to be seen. A key factor here is future ordering activity, which to great extent is linked to the performance and prospects both for ice and non-ice class tonnage”, Gibson concluded.
Meanwhile, in the crude tanker markets this week, in the Middle East, “VLCC Charterers refused to inject enough April action into the marketplace to re-light any fires, but Owners were equally obstinate in their refusal to allow for any meaningful slippage either. Stalemate then, and the centrepoint ws 50 to the East and ws 26 to the West remained intact with ‘outliers’ concluded on both sides of those marks. Easter looms, and there will be some potential for a busier patch, but supply seems easily adequate to prevent that converting into anything substantial – if it happens. Suezmaxes found little spark, especially later in the week. There was a flurry of shorthaul interest, but that couldn’t budge rates from an average 130,000 by ws 85 East and low ws 40s to the West. Again, little change forecast. Aframaxes failed to realise their hoped for potential emanating from improvements in the short far Eastern scene, but did manage to creep a little higher to 80,000 by ws 115 to Singapore, nonetheless. Consolidation is now on the cards”, Gibson concluded.
