The expansion of the Panamax Canal stated for completion in 2015, is expected to radically affect maritime trade, although there is still doubt as to the opportunities it could entail for the tanker industry. According to its latest report, shipbroker Gibson noted that the projected construction of two new sets of locks, effectively creating a third traffic lane, will allow the passage of larger vessels. Upon completion Suezmaxes will be able to transit the canal with around 130,000mt onboard, limited only by the new draft restriction of 15.24m.
Gibson noted that "with Asian appetite for crude from the Americas increasing, this suggests an opportunity for the Suezmax operator. Distances from Venezuela to Asia are considerably shorter via Panama than going via the Cape if the destination is anywhere north of Thailand; for example, Venezuela to Ningbo is 12 days shorter (basis 12 knots).. If the oil price is in step backwardation there could be an incentive for charterers to take the quicker route. There are other potential scenarios that could advantage the Suezmax option via Panama: for example, if VLCCs are trading at a strong premium to Suezmaxes and/or there is a lack of VLCC availability in the Americas. Also, if constraints limit the ability to accept a fully laden VLCC at the load/discharge ports, then the Suezmax via Panamamaybe a more attractive option. However, these are likely to be opportunistic situations at best; it is hard to believe such ‘Suezmax scenarios’ could exist on a permanent (or even long term) basis. For these reasons, we believe the VLCC option via the Cape will still typically be the cheaper option and leave no room for a major upturn in Suezmax demand from the expansion of the Panama Canal" the shipbroker said.
Gibson added that "this is perhaps no surprise given the current income structure (see graph below), reinforced by Panama Canal Administrator Jorge L. Quijano, who recently commented that the new opportunities for Panama trade include container and dry bulk carriers, as well as the possibilities for LNG. But there are still questions here. The cost of the expansion is to be paid for by users of the “super-locks” through higher tariffs and this could be a deterrent. Also, the biggest contributor to revenues is the container trade and even when expanded, the canal will not be able to accommodate the 49 existing vessels and the 86 on order that are in the range 13,500 - 18,000 teu. Maersk has also announced that it now favours the Suez Canal routing as the economics are far better than Panama. This all adds up to stiffer competition between the two waterways and it seems the main Suez/Panama battle for businness will lie in the container market and Suezmax tankers will only play a minor role in the Panama expansion", Gibson concluded.
In a separate report last week, BIMCO noted that per its estimates,  T/C equivalent average earnings for the Suezmax crude oil carriers are seen to hold on to recent gains at USD 12,000-22,000 per day. For the Aframax segment, expectations are that earnings have found balance around USD 12,000-18,000 per day. The report added that "when talking about tanker market fundamentals, one has to start with the tonnage oversupply issues which have plagued the market in recent years. According to BIMCO, "ordering of new tankers has been very much focused on the product tanker segments and not surprisingly on the MR segment the most where 23 out of 33 orders were placed. As 14 new MRs have been delivered in 2013 by mid-March the orderbook-to-fleet ratio was raised to 18% for MRs of 45,000-60,000 DWT. This total activity meant that the product tanker orderbook rose from 193 to 204 vessels including all product tanker segments.
In the crude segment only 14 orders have surfaced in 2013 bringing the order book yet for delivery further down reflecting poor earnings. This is however a positive message to the troubled operators and owners who are active in the presently very poor crude oil market. Focusing on the crude oil tanker segment and newbuildings for future delivery, we find that 81 VLCCs, 62 Suezmax’ s and 42 Aframax are due for launch in the coming 3 years. While this is not gloomy in itself for the Aframax segment, it relates differently to the Suezmax and VLCC segment, where the orderbook-to-fleet ratios for both segments are 14%. Trouble is that future deliveries are building on top of a high inflow in previous years at a time when a new demand picture is being drawn up – presumable one that challenges these segments for some time going forward; this is the real worry" it said.
BIMCO estimates crude tanker supply growth in 2013 to come in at 3.3% down from 4.4% in 2012. "We expect the removal of special survey/intermediate survey (SS/IS)-due VLCC tonnage from “active trading” to positively contribute to limit fleet growth and forecast 10 million DWT to leave the active fleet on that account. In our SMO&O December 2012 report we accounted for 60 VLCCs with SS/IS-survey due within the next three years. While going through that list with a fine-toothed comb we found that: 1 passed SS in 2012, 6 are now sold for conversion into FPSO, 30 are still active in trading (or expected to be), 3 sold to bunker specialists presumably for storage, 14 inactive/in lay-up, while that status for the last 6 VLCCs are uncertain. But it remains that no one has yet been outright demolished" the report said.