Drewry’s latest Tanker Forecaster report shows that another
tough year is on the horizon for tanker owners as the market continues
to struggle under the pressure of overcapacity. Global oil consumption
only managed a timid growth in the fourth quarter of 2012, with global
crude oil loadings increasing by 0.6%.OECD consumption shrank by 1.0%, despite US Gulf Coast refiners
increasing imports of heavy crude from the Middle East Gulf by 2%. This
contrasted with a 2.7% increase in non-OECD countries as weak US demand
for light crude forced West African producers to export to eastern
markets.Tonnage demand in the tanker market increased 0.6% to 325 million dwt in the fourth quarter, and Drewry expects this to increase by 2.6% to
330 million dwt in 2013. However, 26.4 million dwt of fresh tonnage is
due for delivery in 2013. The last quarter of 2012 saw the tanker fleet
expand by 4.3 million dwt to reach over 412 million dwt.Capacity expansion in the dirty tanker segment was faster than for
clean tankers, at 3.4% compared with 2.5%. In both categories, almost
all the additions took place in larger vessels segments such as VLCC,
Suezmax and LR2. The fleet of smaller vessels shrank, suggesting that
owners are being attracted to the economies of scale offered by larger
vessels. Deliveries continue to outpace strong demolitions, which
reached their second highest level for five years with over 11 million
dwt demolished.A persistent weakness in freight rates, in conjunction with high
bunker prices, limited availability of credit and very low earnings have discouraged owners from placing new orders, despite falling prices.
With earnings at unattractive levels, owners remained reluctant to take
deliveries as delivery slippage reached 38% in 2012. Even the strategy
of yards to attract owners by offering vessel designs with improved
efficiency in the scenario of rising fuel cost does not seem to be
working at this stage.The orderbook has now shrunk to a mere 12% of the existing fleet,
which suggests that the pace of supply growth will lose some steam after 2013. With less than 13 million dwt of tanker tonnage ordered in 2012,
Drewry expects the tanker fleet to grow at relatively slower pace of
about 3% CAGR during 2013-17, to 487 million dwt. This is down from 14.9 million dwt and 36 million dwt in 2011 and 2010 respectively.A good recovery in tonnage demand is anticipated from 2014 onwards
with a gradual improvement in the global economy and a corresponding
increase in oil demand, particularly in Asia, the Middle East and Latin
America. A gradual increase in average voyage length due to the shift in trading patterns should also result in higher tonnage demand for oil
tankers.Demand is forecast to rise steadily at about 5% a year through
2013-17 to roughly 405 million dwt. Tanker utilisation is thus expected
to improve after 2013 as demand growth gathers steam and supply growth
slackens, which should translate into improved earnings for owners.
OPINION
12 February 2013 - 21:33
Drewry: Overcapacity to Ease Gradually after 2013
Drewry’s latest Tanker Forecaster report shows that another tough year is on the horizon for tanker owners as the market
OPINION
12 February 2013 - 21:33
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