Shipowners warn! The tanker market inflection point is coming
2017-08-11 09:00
Global first half Oil tanker The number of new ship orders in the market surged, with Chinese and South Korean shipbuilding industries becoming the biggest beneficiaries. At the same time, the oil tanker industry has fallen into a slump, and a large number of new ships delivered by Chinese and South Korean shipyards are continuously entering the market. The turning point for the oil shipping market may be approaching soon.
Belgian oil tanker giant Euronav recently warned that losses have become an undeniable fact due to a large number of new ships entering the market from Asian shipyards in the second quarter, further disrupting the fragile supply-demand balance of the oil tanker market.
Euronav's net loss in the second quarter reached 24.24 million US dollars. Euronav stated that the oil shipping market might be more challenging in the near future than in the past two and a half years, so the company's half-year report is not expected to yield positive results. According to the current shareholder return policy, the company will not distribute interim or final dividends. Euronav CEO Paddy Rodgers stated, The main challenge facing the oil tanker market is the delivery of a large number of newly built VLCCs and Suezmax tankers within the next 18 months, which will put pressure on market freight rates. He urged shipowners to postpone ordering new ships and consider scrapping some older vessels. Rodgers added that if oil shipping freight rates remain low, the effective way to push up freight rates is to increase scrapping activities until the turning point arrives. The current market environment remains challenging, and the duration of the cycle completely depends on whether shipowners order additional new ships in the newbuilding market. To this end, Euronav will continue to balance its balance sheet, obtaining fixed income through time charter agreements during periods of low freight rates, thereby gaining an advantage for expansion opportunities.
Photo: A large number of oil tankers anchored near Singapore on July 9
Current statistics on global oil tanker orderbooks indicate that the newbuilding delivery schedule is very likely to continue putting pressure on the oil shipping market. In the second half of 2017, 28 VLCCs and 23 Suezmax tankers will be delivered. Euronav believes that the oil tanker market is entering a new cycle, with current oil tanker asset prices stable, but market freight rates still under pressure and uncertain. Euronav stated that it will target the next oil tanker cycle phase and continue to seek potential upside once the freight rate environment improves.
Entering 2017, the number of new ship orders in the global oil tanker market surged, In the first half alone, the number of new VLCC orders has nearly tripled compared to last year's full year, reaching 38 new VLCC ship orders. MR type Product tanker new ship orders exceeded last year's total, Most new oil tanker orders for other vessel types also exceeded last year's full-year figures, with nearly half of the orders signed and placed in June. According to International Ship Network, among them, Euronav placed orders at Hyundai Heavy Industries also ordered 2 high-specification 1C ice-class Suezmax tankers. Euronav stated that the price of these two Suezmax tankers is highly competitive, and the new orders are in line with its strategy of not adding more speculative vessels. Euronav plans to replace older vessels with new Suezmax tankers; therefore, this series of new ship orders will not increase global Suezmax tanker capacity.
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