Expected tanker newbuilding deliveries, possible further ordering and low scrapping numbers will likely result in a renewal peak for this sector in two to three years time, according to Affinity (Shipping).
Speaking at a London International Shipping Week seminar at the Institute of Chartered Shipbrokers Affinity Research managing partner Mark Williams said: “At some point around 2019-2020 we are going to see a huge boom in fleet renewal in the tanker markets.”
“It will be interesting to see what kind of ships they [owners] will buy.”
Williams said some 211 tanker newbuildings have been delivered this year including 37 VLCCs, with a further 16 scheduled for handover in 2017.
A further 46 VLCCs are due for delivery in 2018 with 33 to follow in 2019 and owners still showing latent interest in ordering, he said.
The industry could easily see 50 VLCCs delivering each year despite the lack of available finance for newbuildings, Williams added.
The research chief said supply side discipline is “always a problem” for the tanker markets where short-term changes in the freight market have traditionally resulted in long-term investments.
“We are talking about smart money,” he joked. “Well this ain’t smart money.”
Williams said 34 tankers have been sold for scrap this year with another 22 committed for demolition but not yet beached.
He said owners are keeping their vessels running until the last possible date but over the next five years, particularly with the advent of new regulations, he would expect a large number of vessels not to pass their fourth and fifth special surveys.
Charter rates for VLCCs this year are expected to average out at $25,000-to $30,000 per day, according to Affinity. This stack up as a 10% fall on last year’s figures.
Williams estimates they will be “a bit lower” again next year which will bring down levels for the rest of the tanker market.
