Tanker market has stumbled all the way to the end of the year with values changing dramatically in the past ten months.

After the prosperity in H1 and the following great plunge in the third quarter, tanker price has gradually become stable till now. However, insiders’ predictions for the forth quarter are not so optimistic. The sluggish global economy and the capacity surplus depress the overall shipping and shipbuilding market. Tanker market has witnessed declines in both orders and prices since the third quarter.

According to the statistics from Eshiptrading.com, Chinese shipyards received 14 tanker orders in the first three quarters while Korean shipbuilders secured 88 new vessels, most of which are fixed in the second quarter. In S&P market, 73 secondhand tankers changed hand till September. In chartering market, only 11 tankers got chartering contract in the period. It seems both shipowners and lessees are waiting for better prices to enter the market. However, some experts estimate the tanker value and freight rates are likely to rebound at current rock-bottom level, which mean the waiting players are to miss the best times.

In China, the best shipbuilders of tanker are supposed to be Rongsheng Heavy Industry and DSIC who built the first VLCC in China. Rongsheng performed eminently by inking abundant special tanker orders in the shipbuilding slump. In September, the shipyard got a pair of 75k dwt shuttle tankers from compatriot shipowner.

Similar with other ship types, economic downturn and overcapacity has push the tanker builders to predicament in which they will run out of orderbook and at the same time face losses from delivery delay or order cancelation. The capacity oversupply and low freight rates also made tanker owners’ operation grow harder. But few domestic owners consider withdrawing from the market given the policy “Domestic tankers carry domestic oil”.

For those competitive enterprises, it may be a good opportunity to purchase large tankers or special tanker at low cost, to enhance fleet size and comprehensive strength. China Merchant is planning to raise $460m to pen 10 VLCCs for expand its tanker fleet.

Under new IMO rules, shipowners have to take green ship requirements into consideration in choosing ship types. For its high frequency of oil spill and pollution accidents, environmental-friendly standards for tankers are increasingly strict. The development of new efficient and environmental-friendly tankers meeting new regulations is the current priority of the market. Insiders predict demands for Aframax and MR product oil tankers would be on the rise.

Chinese government has taken measures to regulate the market. In September, Ministry of Transport made announcement to limit the operation of domestic product oil transportation in coastal provinces. The government expects to mitigate the growing overcapacity by providing cushioning time for market to absorb excessive capacity.

The market demand and new order volume for 2012 is estimated to exceed that of 2011. Some experts think the market would go through adjustment phase in the following years with no trading upsurge.