Business Sectors
Events
Contents
Register to read more articles.
Weakest tanker orderbook in decades
The tanker sale and purchase market remains active, but the lack of orders means the orderbook continues to contract
The 16 VLCCs sold in May and June 2022 fall into two distinct categories: those less than 15 years old, the age cut-off for charter by oil majors; and those older than the 15 years. Another distinction can be made regarding the buyers: those VLCCs older than 15 years were acquired by companies based in non-aligned regions, mainly China, but also countries in the Middle East.
The youngest VLCCs to be sold were the four Hunter Group vessels, sold for US$95.5M to US$96M each, depending on the source of the report. These four scrubber-equipped VLCCs were built at Daewoo in 2020 and were ordered in 2018 for US$86M. In 2018, the company stated that the cost was below the nominal average cost of VLCC newbuildings over the last 20 years and that in itself is an incentive to invest in VLCCs. It added that as newbuilding costs go up, so will the value of modern tonnage already available. And so it would seem, with the sales equivalent to a profit of approximately US$10M per VLCC.
Six of the eight older VLCCs have been sold with a dry-docking due in a short time. Nucleus (2007), Neptun (2007), Koho I (2005), and Niki (2000) also do not have ballast water treatment systems (BWTS) fitted. This could add another US$1M or more at dry-docking if a BWTS was to be retrofit installed. The other four, DHT Hawk (2007), DHT Falcon (2006), New Spirit (2005), and Maridaki (2005) are reported to have BWTS installed.
Nine Suezmax sales took place during May and June 2022, including one newbuilding sold by Eastern Pacific for an unreported price to a Japanese company. Euronav sold two Suezmax tankers, including the 2003-built Cap Leon for unreported prices, but in a statement, the company said that the combined capital gain realised on these sales amounts to US$12.4M. Apparently one of the vessels will exit the global fleet to be deployed on storage contracts.
“As newbuilding costs go up, so will the value of modern tonnage already available”
A newly created Nasdaq-listed company was reported to have acquired three Suezmax tankers. Brokers report that the StealthGas spinoff, Imperial Petroleum, has acquired the 2009-built Marvin Star at auction, the 2008-built 17 February and the 2007-built Libya. The latter two were bought from Libya’s state company GNMTC.
Imperial Petroleum was created to increase its business focus on tankers, alleviate market confusion and attract new investors, and, with this separation of sectors, give shareholders the flexibility to adjust their holdings according to the sectors in which they want to invest. The newly acquired vessels with join the 2021-built, 115,000-dwt Aframax tanker Stealth Berana, 2008-built, 47,000-dwt MR tanker Clean Thrasher, 2008-built, 47,000-dwt MR tanker Magic Wand, and the 2009-built, 46,000-dwt MR tanker Falcon Maryam.
Prices for second hand tankers are on the rise. According to VesselsValue, the value of a 10 year-old Suezmax increased by nearly 5% in June 2022, and the value of a 15 year-old Aframax by nearly 15% during the same period.
In an increasingly rare piece of news, an agreement has been reportedly signed for a series of eight methanol-powered 50,000-dwt product tankers at New Times Shipbuilding. The contract is at the agreement-in-principle stage, and is dependent on placing the first payment in July 2022, with the vessels being delivered in 2025, according to shipbuilding consultancy, BRL.
The agreement is between EuroGreen Maritime and New Times Shipbuilding. EuroGreen is a new name and is reportedly headed by Rolf Wikborg. Mr Wikborg is a former shipping banker and appears to be tapping into funds available for green projects in Norway and the EU.
It has been reported that the construction of the deal includes seven-year time charters upon delivery, but this has not been confirmed. The price of US$58M each is on the high side compared to the last publicly known newbuilding contract of US$39M, recorded for the Asiatic Lloyd orders at Hyundai Vietnam, but reflects the higher specification, including the methanol dual-fuel capability.
“The container ship orderbook is now larger than the combined orderbooks of the dry bulk carrier and tanker sectors”
In that respect, the specification is likely to be closer to that of Proman Stena Bulk’s MR2 tankers, ordered at CSSC OME and reportedly priced at US$38M each in 2019. The pricing and delivery time of the EuroGreen Maritime product tankers is in line with that given for MR tankers by EA Gibsons director Richard Matthews at the inaugural Chemical & Product Conference in April 2022.
An analysis of the newbuilding market by Clarkson Research Services (CRS) reveals that the shipbuilding industry is being almost completely led by the LNG and container ship sectors. The container ship orderbook is now larger than the combined orderbooks of the dry bulk carrier and tanker sectors.
CRS reports that just 22M dwt of tanker capacity was ordered in 2021, 21% below the 10-year average of 28M dwt. At the mid-point of 2022, just 2M dwt had been ordered. This is the lowest ever period of tanker contracting, producing the weakest tanker orderbook (35M dwt) for decades. As a result, the overall tanker orderbook is 5.2% of the current fleet.
Delving deeper into the numbers, the VLCC orderbook is just 4.9% of the current fleet, Suezmax tankers 3.9% of the current Suezmax tanker fleet and Aframax a more ‘normal’ 8.9% of the current fleet.
One driving force behind the reluctance to commit to tanker orders is price inflation. CRS reports that VLCC prices have risen by 30% since 2020, despite the lack of contacting. Steel prices and competition for slots from the ever-more popular container ship sector is driving up prices.
Related to this Story
Events
Maritime Environmental Protection Webinar Week
12 May 2025
BST - ONLINE
The illusion of safety: what we're getting wrong about crews, tech, and fatigue
13 May 2025CET - ONLINE
Responsible Ship Recycling Forum 2025
14 May 2025London
© 2024 Riviera Maritime Media Ltd.
