A vessel for Oman Shipping was the only VLCC order placed in June 2019, after four months without orders which must have had shipyards seriously worried as to the direction the VLCC sector was heading
The order from Oman Shipping is only the 15th VLCC newbuilding contract placed in 2019, with 13 placed in January. The June Oman Shipping deal was for a reported US$91.3M, which is around US$3M less than a similar VLCC ordered at the same yard a year ago. According to Clarkson Research Services, the number of VLCCs on order is now 81 vessels with capacity of approximately 25M dwt. This represents 10% of the current VLCC fleet.
Compared to the VLCC sector, there have been fewer Suezmax tanker orders (13 to the end of June 2019), but there has been a steady flow of orders from Greek family-owned tanker operations. Three orders were placed in May 2019 – two at Daehan for the Greek Lemos family company Enesel and one at Japan Marine United for Samos Steamship, part of the Inglessis family group.
In June, Avin International (the Vardinogiannis family company) placed two contracts for Suezmax tanker newbuildings with Hyundai Heavy Industries at a reported US$64M each.
The aforementioned Daehan shipyard was active in the Aframax sector, winning four contracts from Minerva Shipping, Greece (part of the Martinos family business) for a reported US$200M en bloc. All the vessels are due for delivery in 2021 and are reported to have been ordered without scrubbers.
With 48 live tankers, John Fredriksen’s Frontline group is one of the largest tanker owners but has not ordered a new vessel since May 2017. In June the group placed newbuilding orders with Shanghai Waigaoqiao Shipbuilding for two LR2 tankers at a reported US$46.7M. Maersk Tankers has also ordered LR2 tankers in China. Dalian Shipbuilding is set to deliver the four tankers in 2020. The price was not reported.
The demolition market has been relatively quiet, with just two VLCCs sold for demolition in May and June 2019. The 1996-built Watban was sold by Bahri for a reported US$440/ldt and Navios Maritime Acquisition sold the 2001-built Shinyo Ocean to a recycling yard in Bangladesh. The vessel had been involved in an incident. On 24 March 2019, the Shipping Corporation of India LNG carrier Aseem collided with Shinyo Ocean, which was in ballast at the time of the incident and received an LNG carrier-shaped incursion to the bow.
May also saw the sale of two Teekay shuttle tankers to Indian breakers for a reported US$430/ldt, a somewhat firm price which may be due to the extra shuttle tanker equipment on board.
The impact on the tanker fleet supply and demand from the additions and deletions is for the VLCC fleet supply to be around 4% greater than demand in 2020 (see table), rising to 6% over-supply in the Aframax sector.