Hellas-based tanker owners have failed to spark a new wave of newbuilding orders as was usually the case during the international exhibition of Posidonia, which brought together delegates from the largest ship owning base of the world and all of the biggest shipyards globally. According to the latest weekly report from Gibson, “Posidonia is often the vehicle used to announce the latest round of tanker investment, this year it has been ominously silent. In the first 5 months of this year, Hellenic shipowners have placed orders for just 3 tankers resulting in a mere 300,000 dwt being added to the orderbook.
“During the whole of 2011 Greeks placed orders amounting to 3.6 million dwt (32 tankers). So have Greek shipowners lost their appetite for tanker investment in newbuildings or are they being more selective in their approach? Obviously the pace of ordering has eased considerably in recent months as the supply situation chokes the life out of the tanker market. However, our graph clearly demonstrates the high level of investment placed by Greek owners during the boom years. In deadweight terms, Greek owners are set to take nearly 23% of the current tanker orderbook still under construction which considerably outweighs the contribution of any other domicile nation. Greeks now appear to be been more selective in their choice of investment with more emphasis on specialist vessels such as tankers fitted with dynamic positioning (for the offshore sector) tied into timecharter deals. Also, Greek orders for LNG carriers has numbered 33 since the beginning of 2011 and several VLCC orders have been converted to LNG orders to take advantage of a sector where the supply situation is failing to keep pace with demand” said Gibson.
The UK-based shipbroker concluded by mentioning that “of course historically Greek owners have been great players in the second-hand market. Despite the turmoil in the domestic economy, Greeks still appear to have cash to spend in the sale and purchase market. Owners have taken advantage of declining asset values and plundered yard resales as well as conventional acquisitions. However, finding employment for the next wave of tanker deliveries may be the first obstacle to the shipowners. Distancing themselves from any government enforced austerity measures could be another challenge” said Gibson.
Meawhile, in the tanker market this week and more specifically in the Middle East, Gibson noted that “the shorter week here in the UK was going to take its toll on everyone's patience elsewhere and coupling this with the parties in Athens, a disjointed and bitty approach was only going to provoke one direction on the rates; downwards. The overhang of June tonnage for the following month and the eventual clear out of the end of month stems has seen last done East go as low as 260 x WS 45 and West to around 280 x WS 32, with further misery for Owners predicted. Suezmaxes and Aframaxes have suffered a similar fate as enquiry has been kept to a minimum, whereby Suezmaxes see 140 x WS 45 for West and 130 x WS 80 for East. Aframaxes can only be put under further pressure by the weaker bunker price, as other fundamentals cannot take the rates much lower as we see AG/East at around 80 x WS 90 still” it said.
In a separate note, Paris-based Barry Rogliano Salles mentioned that “the main topic last week has been the sharp drop in bunker prices (at least during the first half of the week). As an example, heavy fuel ex Fujairah went from $644/Mt to $607/Mt. If such news obviously has a positive impact on time charter equivalents, the permanent overcapacity of VLCC tonnage has allowed charterers to counterbalance this positive influence. On the VLCC front from MEG, demand has been far too slow (less than 20 cargoes covered) to avoid severe drops in rates. The week ended in the mid-WS40s for voyages to the Far East (- 5 pts) which, despite lower bunker costs and slow speed, provided lower daily returns (about $17,000 versus close to $20,000 the week before). The same negative trend has been experienced for voyages to the West with rates lowered by about 3 points and new negative TCE rates basis a theoretical speed of 14 knots on a round voyage. Activity has also been very limited in the western hemisphere. The few voyages concluded for eastern destinations registered lower freights. As an example, voyages from the Caribbean to Singapore fell from $4.5 m to $4.1 m” it said.
Meanwhile, the Suezmax market has been relatively quiet this week. According to the report “as expected, the Queen’s Jubilee in London and Posidonia events in Greece contributed to a slow-down in demand and the flow of information in most geographical zones. The result was that, notwithstanding some decent secret cargoes, rates kept on dropping where possible and remained stable at a low level elsewhere. Moneywise the benchmark for the Black Sea/Med route is now at WS72.5 levels with a TCE rate of about $15,000 /day, while, from West Africa, owners had to lower their expectations and rates are now in the mid/high WS60s for
transatlantic voyages. Although rates decreased by 5 points, the impact of lower bunker costs has limited the fall in daily returns which are now fetching $18,000. The immediate future does not look much better than this, even if some positive feelings have been recorded in W.Afr. at the end of the week” it concluded.