Gibsons’ tanker market outlook for the year ahead
Before the Coronavirus outbreak 2020 looked set to build on a positive 2019, according to shipbroker, Gibson. It said: “The current situation with the Coronavirus has seen many flights to China discontinued until further notice, could this also happen within the tanker sector?”
Elsewhere it said the re-emergence of the COSCO Dalian vessels could be detrimental to tanker earnings going forward. “Also, there is much uncertainty over decarbonisation regulations which seems to be curbing newbuilding orders. The flip side to this could be that the low volume of vessel ordering in 2019 has provided a period of controlled fleet growth, which if continued could bring better fundamentals for tanker earnings.”
Talking about 2019’s positive results, Gibson said: “Earnings across the board were up compared to 2018, with returns for VLCCs rising and Aframax following suit with earnings also rising. But owners were still uncertain about the future and there was limited financing available, which had a dampening effect on owners ordering new tonnage.
“Overall orders for the year topped 200 tankers, an increase of 39 per cent compared to the previous year, but still a long way behind the 360 vessels that were ordered in 2015. Owners were ordering MRs, Aframaxes/LR2s and Suezmaxes with renewed vigour, while VLCCs orders remained at similar levels to 2018 with 41 vessels”.
It said the orders “poured” into South Korea, which remains the dominate player in the newbuilding sector taking 56 per cent of all tanker orders during 2019. Chinese yards received 62 tanker orders, while orders continue to be placed in Japan, albeit at a much lower volume when compared to historic levels, with just 18 tankers.
Russia and Vietnam were the only other countries that reported orders for deepsea tankers last year. With the increase in ordering compared to the previous year, there was an up-tick in newbuilding prices with VLCC prices rising by £3.1m to £71.4m and Suezmax prices rising by £2.3m to £48.1m.
It added: “These price rises come at a time when there is uncertainty in the shipbuilding world as various yards in South Korea, China, Japan and Singapore are all considering the benefits of merging. Sinokor ordered the largest number of tankers, with 10 Aframaxes, four MRs and four VLCCs during the year. The Aframaxes will be constructed at Samsung and delivered in 2021. These will be LNG powered and will be chartered to Shell. The VLCCs will be built at Daewoo, whilst the MRs will be constructed at Hyundai Mipo”.
For more information visit www.gibsons.co.uk
10th February 2020
