Another consequence of poor freight rates and the oversupply situation n is the impact on as set values. Preliminary analysis of sale and purchase activity for 20012 indicates that the number of second-hand tanker sales fell to the lowest level since 2009. Asset values fell steadily throughout last year bringing prices for some of the older tankers close to scrap levels (as lightweight prices remained relatively firm). Ad to the mix the high bunker prices, particularly in the 1st quarter, and it was no surprise that several owners committed to scrap.

Off course, for every tanker sale there has to be a buyer. The general state of the tanker market last year did little to entice owners to make investment in either newbuilding or second-hand tonnage (with a few exceptions)). However, there were some bargains to be ‘snapped up’ with some modern units sold at knock down prices. Several quality units were sold as a few owners were forced into the disposal of assets to keep the balance sheets ticking over. On the US front, two yard resales included two 446,800 dwt Jones Act tankers purchased by Crowley Maritime Corp. from Aker Philadelphia for a reported $90 million each.

Despite the general downturn in new orders, there has been growing interest in the MR sector and as a result over 70% of all confirmed tanker orders placed last year were for MRs. The momentum gained during the year culminated in 227 confirmed MR orders placed in the last two months alone. The popularity of this size of tanker has been emphasized in previous market newbuilding prices, which could also be another reason for the sudden surge in orders? Another incentive to entice owners to buy will be the added extras, which will now almost certainly be part of the standard specification. Demand for eco tankers appears to be the norm rather than the exception and we are aware that owners are looking to replace older tonnage with more “efficient”

newbuildings. However, demand for eco ships could continue to force down tanker second-hand prices to even lower levels. Tankers les than 10 years old with some kin d of retro--modification could become an option should the differential between the newbuild price and the second-hand price continue to widen. There are obviously some strong, cash rich shipowners ready to secure assets at the right price. As always, there will be a right time “to buy”, its just a question of knowing when.