Tanker sales dominate over business done

In the past 12 months, tanker trading was one of the few highlights in the shipping market: an impressive 372 tankers changed hands. The low oil price opened up storage opportunities for older VLCCs. While the trading of VLCCs usually made headlines in the shipping press, in volume and value terms it was the MR2 tanker sector that kept the sale and purchase brokers busy.

Tankers with a value of just over US$10 billion were bought and sold between 1 April 2015 and 31 March 2016, reports VesselsValue. The list of top 10 tanker types traded by value was led by MR2 tankers (chemical/product), which accounted for nearly a quarter of the sales. VLCCs ranked in second place by value, followed by Suezmaxes. But, overall, crude oil tankers accounted for less than half the value of tankers traded. Of course, given their size, VLCCs led the tanker fleet in terms of capacity sold at 10 million dwt, accounting for around a third of the capacity (by dwt) traded.

Tankers with a broad spread of age ranges were traded in the past 12 months, but the majority of MR2 tankers (chemical/product) sales were resales and sales of vessels under five-years old. The VLCC sales included 11 vessels older than the oil majors unofficial chartering cut-off age of 15 years, and these appear to have been sold for storage duties. The trading of VLCCs showed a more traditional spread of peak sales at the 5, 10, and 15-year-old age levels.

The prices paid for these VLCCs sit closely on the median price line derived from the observed sale prices of VLCC sales. Sellers may have realised the best price possible at the time, but these prices were, historically, rather low. The bulk of the sales in terms of numbers of vessels and total value were from companies based in the US, Norway and Greece.

The table of top 10 sellers ranked by value contains a list of familiar names. The Navig8 product tankers sale of a total of 15 ships included three 115,000 dwt Aframax tankers sold to Scorpio Tankers for US$59.5 million each.

In July 2015, CSSC Shipping in Hong Kong was able to purchase Chinese-built vessels from Navig8 for a considerably lower US$47.5 million each. The middle of 2015 also saw Teekay Tankers buy 12 Suezmax tankers from the private-equity backed Principal Management fleet.

Despite the prominence of the large Teekay Tankers purchase, Greek buyers (as usual) were the most active. American companies also purchased a considerable amount of tonnage. It should be noted that intra-US sales involved a premium for Jones Act vessels, for which VesselsValue has calculated the premium (if no sale price was disclosed at the time).

If there is a single discernable pattern to tanker sales in the past 12 months, it was the trading of resales, many of which were said to have been initially ordered to beat the deadline for the introduction of the Tier III emissions regulations. In total, there were 58 resale trades in the past 12 months. In April 2015, Scorpio Tankers raised US$150 million to purchase three LR1 resales from Navig8, which had merged its VLCC fleet with General Maritime to form Gener8 Maritime. Scorpio Tankers later added an LR2 resale from a third party, while Navig8 sold two LR1 resales to CMB Leasing (these two will be delivered in the summer of 2016). Scorpio Tankers purchased a further three LR1 Aframax tankers from Navig8. The pattern of resales is also coloured by the activity of publicly listed companies. Overall, publicly listed companies purchased 26 tankers with a value of US$1,390 million, and sold 20 tankers with a value of US$659 million.