Cash-rich owners are starting to jump on depressed newbuilding prices in the product carrier market.
A new products tanker in South Korea today has a price tag 30% below the 2008 peak, Poten & Partners says.
“To a cash-rich owner in a bad market, newbuildings have the added advantage of delayed delivery, which in theory will allow the market to recover by the time the ship begins to trade,” its weekly report said.
“But aye, there’s the rub. While attractive on a microeconomic level, a widespread resurgence in newbuilding activity could seriously exacerbate oversupply woes and jeopardize the recovery of tanker rates anytime in the near future.”
South Korea has captured 45% of all tanker newbuildings during the past five years, the broker says.
Now owners are turning to China for fresh contracts, with the majority of tankers slated to arrive in 2013 coming from the country.