Euronav chief executive Alexander Saverys believes secondhand VLCC prices have not quite kept pace with freight rate rises.
But he thinks this could change.
Middle East to China spot VLCC runs are up 5% over the past month at $33,400 per day.
But Greece’s Allied Shipbroking quotes a five-year-old VLCC as costing $108.5m, up 2.3% from $106m at the end of 2023.
Euronav sold 24 modern VLCCs to Frontline last year for $2.35bn.
Saverys told an earnings call: “We are seeing very, very healthy secondhand prices for both suezmaxes and VLCCs.
“If we have to say something negative, I will say that the VLCC secondhand market has not gone up as the underlying sentiment would have it.
“It’s been underwhelming a little bit, but we’re expecting this to catch up as the year proceeds, if the fundamentals stay as they are.”
Turning to freight markets, Saverys said that in shipping “there’s things we know and things we don’t know”.
“If we zoom in on the supply side and the fleet composition, which are things that should be relatively certain, I can only say that the signals are still very positive,” he told the call.
Age profile not seen for a long time
“If we look at the orderbook, even though there has been some recent increase in ordering activity specifically for suezmaxes and some VLCCs, we are still at very low orderbook to fleet ratios from a historical point of view, and this definitely for the next two years will be very supportive for our industry.”
Saverys added that it is stating the obvious to say that hardly any tankers are being scrapped so the age profile of the fleet is increasing.
“We are now looking at average ages … that we haven’t seen for a very, very long time,” he said.
“Again, should be a very positive signal going forward.”
The CEO pointed out that a big chunk of the fleet is going to reach the age of 20 in the coming years.
This means a lot of potential to scrap, supporting ship utilisation when it happens, he argues, even if demand stays relatively flat.
“So only positive things to say about the supply side,” he said.
