In Hellenic Shipping News 02/02/2016
In addition, Gibson said that “over the past decade the industry has become more creative and in a way “smarter” when it comes to ordering and financing. There certainly has been more counter-cyclical investment. The latest example of this was the rebound in VLCC ordering in 2013 and the surge in Handy/MR orders in 2012/2013 when spot earnings were relatively weak. This year investment decisions have to be considered against the substantial size of existing orderbook coupled with very limited prospects for tanker demolition in the short term, with 80% of the fleet being less than 15 years of age. As such, shipowners will think long and hard before ordering a new tanker. Any moderation would then reduce the “hangover” once all of the tonnage currently on order is delivered into the market”, Gibson concluded.
In what could be seen as a sign of looming oversupply in the “booming” tanker segment, shipbroker Gibson noted in its latest weekly report that “2015 marked the third consecutive year of strong tanker ordering activity. In fact, total investment in new tonnage reached its highest level since 2007, touching multi-year highs across all tanker categories, except Handy/MRs. Even in the Handy/MR sector, there was a notable increase in ordering activity in the second half of the year”.
According to Gibson, “the prolonged period of robust investment in new tonnage has inflated the orderbook. Currently, the tanker orderbook stands at 16% of total trading fleet from 25,000 dwt plus. However, this cumulative representation masks different developments for individual size groups. The Suezmax fleet has the largest orderbook of all segments, with 24% of its fleet on order. This is a stunning change to the situation less than two years ago, when the orderbook for this size group was just at 9%. LR2/Aframaxes have the second largest orderbook, at 20%; while the VLCC orderbook stands at 19%. Orders for LR1/Panamaxes are somewhat more balanced at 17% relative to fleet size. Finally, MRs and even more so Handy tankers have the smallest orderbook of all size groups, as a result of reduced investment in new tonnage over the past couple of years. The orderbook for MRs is at 14%, while Handy orderbook is minimal at just 4%, although this is largely due to owners’ preference for larger MR size because of greater trading flexibility”, Gibson noted.
According to the shipbroker, “it will be interesting to see what will happen to ordering activity this year. As it has frequently been the case in the past, investment in new tonnage is greatly stimulated by high earnings at the time. With spot returns at healthy levels across nearly all tanker sectors, this may suggest that we are unlikely to see a dramatic slowdown in new orders anytime soon. Furthermore, the malaise and a resulting lull in ordering activity in other shipping sectors mean that newbuilding prices remain attractive. However, so far this year tanker ordering has been minimal, although this could be temporary as some orders were fast tracked to 2015 to avoid higher costs associated with Tier III regulations” said Gibson.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
