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1  Shipspotters all over the world / Shipping News and information / DFDS to buy UN Ro-Ro in USD1.15 billion deal on: April 12, 2018, 01:01:37 pm
DFDS, the listed Danish ro-ro shipping and logistics group, has agreed to acquire 98.8% of the shares in Turkish freight ferry company UN Ro-Ro for EUR950 million (USD1.15 billion) from Turkish private equity firms Actera Group and Esas Holding.

The Copenhagen-based company has long sought an acquisition target in the ro-ro space and the Turkish company, with a fleet of 12 ships that operate on services connecting Turkey with Italy and France, meet this objective.

The acquisition will extend the route network of DFDS to the eastern Mediterranean. It already has services that link France with north Africa in the Mediterranean.

UN Ro-Ro operates five routes in the Mediterranean: four connect Turkey and Italy and Turkey and France. The company carried 202,000 freight units in 2017, corresponding to a 34% share of the total market, including land transport.

In addition, UN Ro-Ro operates two port terminals and provides intermodal solutions. For 2018, revenue of EUR240 million and EBITDA of EUR97 million are expected. The company has 500 employees.

There will be operational synergies as well, since UN Ro-Ro’s ships were built at the Flensburger yard in Germany and are quite similar to the Flower-class ships of DFDS.

In addition, UN Ro-Ro’s business model of carrying unaccompanied freight units, mainly trailers, on ro-ro ships between Turkey and the European Union is identical to DFDS’s North Sea business model. This will enable DFDS to leverage its strong track record in this market, the company said.

DFDS said the financing would be structured to retain flexibility and includes an expected equity issue of approximately 5% of the issued share capital. Dividends and an ongoing share repurchase programme will be suspended as part of the financing arrangement.

The company has raised its guidance for this year and said EBITDA should now reach DKK3.0–3.2 billion, having previous forecast it at DKK2.65–2.85 billion.

“With the acquisition of UN Ro-Ro, we are expanding into one of Europe’s most attractive freight markets, which is operationally similar to that of northern Europe. This gives us opportunity, together with the existing strong management team, to leverage our network, fleet, experience, and skills to develop the business further, while supporting the growth of UN Ro-Ro’s customers,” Niels Smedegaard, chief executive officer (CEO) of DFDS, said.

“We are excited to become part of DFDS’s network and the development opportunities this brings to both our customers and employees. I am confident that the industry know-how, combined network capabilities and the financial strength of our new shareholder, will allow UN Ro-Ro to enhance the competitiveness of Turkish exporters and international logistics companies,” said Selçuk Boztepe, CEO of UN Ro-Ro.   

The transaction is subject to approval by the Turkish, Austrian, and German competition authorities, as well as the Italian authorities in relation to the transfer of the Trieste terminal as a strategic asset. Closing of the transaction is expected to take place in June.

In view of the planned fleet renewal at both DFDS and UN Ro-Ro and potential investment opportunities during the next 12–18 months, the DFDS board is recommending a share issue of approximately 5% of the current share capital, or DKK1 billion, as part of the financing structure that otherwise consists of committed term loan financing.

An extraordinary general meeting at DFDS will be held prior to the closure of the transaction and the Lauritzen Foundation, which holds 42% of DFDS share capital, has confirmed its intention to participate pro rata in a share issue.

The UN Ro-Ro purchase can be seen as a step in the consolidation of the still largely fragmented European shortsea ro-ro shipping industry. The DFDS network will, after this deal, range from the Baltic to the North Sea, the Bay of Biscay, and both the western and eastern Mediterranean.

The only other ro-ro shipping company with a comparable network is Naples-based Grimaldi group, which, in addition to shortsea vessels, operates deepsea freight ro-ros and pure car and truck carriers and has a hub in Antwerp to link up many of these services.

Smedegaard told Fairplay that the company had expected the sulphur emission rules covering large parts of European waters from the start of 2015 to push some companies into financial difficulties, making them potential acquisition targets. However, a sharp fall in the price of oil in late 2014 cushioned the effects of the cost of compliance with the rules and the expected investment opportunities for DFDS failed to materialise.

Source IHS
2  Shipspotters all over the world / Shipping News and information / Heung-A Shipping to sell more vessels on: March 26, 2018, 09:56:46 am
South Korean feeder operator and chemical tanker operator Heung-A Shipping, having suffered a larger loss in 2017, disclosed that it will sell another vessel to improve its liquidity.

The company’s CEO, Park Seok-mook, made this announcement at Heung-A’s annual general meeting (AGM) on 23 March.

During the AGM, Park confirmed that Heung-A had sold 1998-built 1,032 teu Heung-A Asia to Chinese buyers for USD3.7 million, chartering back the vessel for USD7,500/day.

Park added that by the end of April, Heung-A will sell the 2002-built 1,032 teu Heung-A Venus.

Since June 2017, Heung-A has been selling older vessels to improve its liquidity as the company’s earnings came under pressure.

In June 2017, Heung-A sold the 1991-built 204 teu Nova (renamed Hai Sheng) for USD770,000. In December 2017, the company sold 2010-built 11,896 dwt chemical tanker Golden Pioneer for KRW17.3 billion.

In December 2017, Heung-A said that it would get nearly USD17 million from Korea Maritime Corporation to expand its fleet.

In November 2017, Heung-A also announced that it would issue 41 million new shares to raise KRW33.7 billion (USD31.6 million) for working capital, after suffering consecutive losses for the first nine months of the year.

The company’s net loss widened to KRW73.43 billion for 2017, from KRW17.17 billion in 2016, amid a competitive intra-Asia and chemical shipping market.

The losses have caused Heung-A’s shareholders’ equity to drop to KRW117 billion, from KRW192.5 billion at the end of 2016.

By segment, while the container shipping unit’s revenue increased slightly, to KRW688.6 billion in 2017, from KRW682.7 billion in 2016, the chemical tanker unit’s revenue was down 5% year on year to KRW908.8 billion.

Revenue from Heung-A’s container segment fell in tandem with cargo volumes, as the company handled 1,220,862 teu in 2017, down from 1,223,973 teu in 2016.

Source IHS
3  Shipspotters all over the world / Shipping News and information / Re: MAERSK HONAM on fire in the Arabian Sea on: March 12, 2018, 08:02:15 pm
Three of the four missing crew members from Maersk Honam, which caught fire last week, have been confirmed dead following the discovery of their bodies on board the ship, Maersk announced on 12 March.

One crew member remains missing; however, a Maersk statement reads, “Given the time passed and the severe fire damage of the vessel, we must conclude by now that we have lost all four colleagues who have been missing since the fire on board Maersk Honam, which began on 6 March. All four families of our deceased colleagues have been informed.”

As a result, the search-and-rescue operation has been brought to an end, while a “thorough search on board Maersk Honam continues”, the statement said.

“Our most heartfelt condolences go out to the families of our deceased colleagues. We share their sorrow and do our utmost to support them at this devastating time,” said the company's chief operating officer, Søren Toft.

Maersk said the condition of the 22 survivors is improving and that those who were in intensive care have now been moved to general wards, while many others have been discharged from hospital.

Smit Salvage and Ardent continue salvage operations on board the stricken vessel, while specialised firefighting vessels “remain engaged”.

India’s marine police will interview the surviving crew members about the incident in what Maersk Line called a “routine investigation”. But the company added that a full investigation to determine the causes of the accident and to ascertain the damages to the vessel and cargo will also be conducted at a later stage.

Source IHS
4  Shipspotters all over the world / Shipping News and information / New services herald start of Hamburg Süd integration with Maersk on: February 22, 2018, 06:20:30 am
Maersk and Hamburg Süd have announced the launch of three new services on its Asia to Latin America trades, Maersk COO Søren Toft told the audience at the company’s Capital Markets Day in Copenhagen on 20 February.

A return of the round-the-world services, first launched by Evergreen in the early 1980s and discontinued some 20 years later, has been announced by Maersk and its Hamburg Süd subsidiary. This will be supplemented with two services operating out of China, via Chile and New Zealand, with one service operating in a clockwise direction and the other counter-clockwise.

Integration of the Hamburg Süd network is set to start in the second quarter of this year, Toft said, adding that the acquisition of the German carrier will allow the company to develop these services.

“With the acquisition of Hamburg Süd we now have the scale and it makes sense for us to go through the [Panama] canal and serve the Caribbean market. At some point you get the scale and you want to do it, but if you don’t have the scale it becomes an expensive option,” explained Toft.

He added that Maersk has a very large market share in the Caribbean market, with Brazil and Argentina starting to recover from three to four years of poor growth. Brazil showed growth last year of nearly 10%, giving lines the opportunity to serve the Caribbean and the northern part of Brazil, meaning that “we don’t have to serve northern Brazil with our service that goes to Asia south of the Cape. It is really a Caribbean and Brazilian product that nobody else can match”.

“We are keeping the commercial front end of Hamburg Süd and we also want to keep their service branding the same. So it’s the same network, but they market it under the ASPA network - ASPA 1, 2, 3, and 5, because 4 is a bad number in China - and Maersk market the same network as the AC services,” Toft told Fairplay.

AC [ASPA] 5 is the global service and there will be 12 or 13 ships of around 10,000 teu operating on this service, while the AC1 service will be operated by 4,500 teu ships and the AC2 and 3 services will be operated by 9,500 teu vessels.

Toft said, “The new AC5 service will call in Asia, the Caribbean, both sides, and then straight back south to the Cape. We have the option, depending on our cargo flows, to once in a while send this service through the Suez Canal and once in a while to send it south to the Cape, but the plan is mainly for it to go round the Cape.”

Cargo bookings for the AC5 service are expected to begin in the next two weeks.

“We have already announced the major port calls but we will give a more detailed overview of the rotations during the early part of March [before] the system goes live about a month later,” promised Toft.

Source IHS
5  Shipspotters all over the world / Shipping News and information / Re: List of worldwide over 5000 containerships on: February 18, 2018, 09:41:22 pm
Thanks Andreas,for your big effort and sharing this exellent list with us.

Brgds
Hannes.
6  Shipspotters all over the world / Shipping News and information / Shortsea carrier Scotline goes ordering for fleet renewal on: February 01, 2018, 06:54:33 pm
UK shortsea carrier Scotline announced on 1 February the signing of a newbuilding contract for one general cargo ship plus one option at Dutch shipyard Royal Bodewes.

The order for a 4,785 dwt vessel, to be named Scot Carrier, plus an option for an identical sister follows on from last year’s comissioning of a similar ship by Scotline (Scot Navigator) also delivered by Royal Bowedes. Delivery of Scot Carrier with a length of close to 90 m and a beam of 15.2 m is scheduled for November this year.

Operated under the British flag and classed by Lloyd’s Register, the ship will enter Scotline’s core services between Scandinavia, the Baltic Sea region, UK, and Ireland, focusing on forest products as base cargoes and operated with its fleet of eight owned ships. The new investment is part of the company‘s fleet renewal programme, Scotline said in a statement on 1 February.

Scot Carrier will have some new features including bulk heads, container fittings, and lashing points for project cargo on the tank top, in what Scotline’s commercial manager Jon Millatt described as "ticking as many boxes as possible in the design process“ to increase the ship’s flexibility and resale value. A case in point is Scotline’s enhanced capability to cater for market grain cargoes as additional spot business thanks to bulk heads. "We want the ships to be as versatile as possible, so we can move with the market, which will change during the lifetime of the ship,” he said.

Spot earnings in the European shortsea market kept climbing last year, with average net freight rates for business within the North European Sulphur Emissions Control Area rising from EUR8.5 (USD10.13) per tonne in August to almost EUR20 per tonne in November, according to German shortsea broker Arkon Shipping.

Rates eased off at the start of this year although they remain higher than this time during previous years, with underlying demand and sentiment pointing to a relatively strong market throughout the first quarter, Arkon said in a market update on 1 February.

Source IHS
7  Shipspotters all over the world / Shipping News and information / Peter Döhle and Costamare merge chartering operations on: February 01, 2018, 06:51:23 pm
Two of the largest non-operating container shipowners have merged their chartering operations, creating probably the biggest exclusively managed tramp container ship fleet.

German shipowner Peter Döhle and Greek owner Costamare advised their clients in a 1 February circular that their chartering desks have now been integrated in a company called Blue Net Chartering. The official launch took place on 1 February.

Headquartered in Hamburg, Germany, the chartering outfit will be in charge of marketing a combined fleet of 220 container vessels with an aggregate capacity of 1.1 million teu, Blue Net Chartering said in its client advisory. The exclusive fleet includes technically managed vessels of Peter Döhle, Costamare, and unspecified third-party owners. Ownership and financials of all vessels involved will continue being handled separately by the owners.

Through increased scale, the partners hope to provide “best-in-class employment opportunites for container shipowners”, Blue Net Chartering said.

The launch of the Döhle/Costamare joint venture marks another milestone in consolidation of commercial management among non-operating container shipowners, apparently as a counterbalance to the rapid concentration among liner operators who charter their ships.

Döhle itself already farmed out chartering operations for all its small feeder ships into another joint venture, Ernst Russ Shipbroker, back in 2013. The latter oversees chartering of feeder vessels that had previously been marketed individually by Peter Döhle and former broking firms Stüwe & Co and Ernst Russ.

Focusing on mid-size and large vessels of up to 14,000 teu, Blue Net Chartering is likely to be the biggest exclusive chartering agent for container tramp tonnage, ahead of Hanseatic Unity Chartering – the joint charter brokerage of shipowners Asiatic/Atlantic Lloyd, Borealis Maritime, Leonhardt & Blumberg, Reederei Nord, and Bernhard Schulte.

Blue Net Chartering will be led by Niclas Ahrens and Sebastian Diedrich as managing directors. Ahrens has been working in corporate development at Peter Döhle, while Diedrich used to be chartering manager of liner carrier Hamburg Süd. He joined Blue Net Chartering when it was still under formation at the end of last year.

Leaving his position with Hamburg Süd was probably an easy decision for Diedrich following its takeover by Maersk Line at the end of last year. The Danes have made it clear that they are going to concentrate most operational functions, including chartering and ship management of Hamburg Süd, with those of Maersk in Copenhagen.

Source IHS
8  Shipspotters all over the world / Shipping News and information / Re: Please Help on: January 31, 2018, 05:00:36 pm
Hi Yvon

This is what i found about this vessel. IMO 6876499 Built 1966 as PTS-194 USSR. 1992 as Aal Estonia. 2000-12 as Sagittarius Sao Tome & Principe.2002-02 as VIRGO I Tonga.No further information according Lloyds data.

Rgds Hannes.
9  Shipspotters all over the world / Shipping News and information / Ship crash at Keelung port damages crane and containers on: January 16, 2018, 07:23:28 am
A German-flagged container ship, Hansa Meersburg, crashed into a gantry crane as it was berthing at Taiwan’s Keelung Port on Monday night.

The port operator said the 175 m-long container ship was trying to berth at Terminal 11 when it hit the TWD100 million (USD3.3 million) gantry crane, causing it to collapse.

A worker suffered "'moderate" injuries and more than 80 boxes on the container ship were damaged.

The port authorities immediately launched an investigation into the cause of the incident.A statement said investigators sealed off the scene around the terminal to gather evidence and avoid any oil leak caused by the collision.

The collapsed gantry crane will be removed following the necessary safety procedures and the container ship is not allowed to leave the port before the initial investigation is completed.

IHS Markit Maritime AIS tracking data showed that Hansa Meersburg was sailing from Xiamen, China, on 8 January 2018, to Osaka in Japan.

Hansa Meersburg (1,740 teu) was built by Guangzhou Wenchong Shipyard in 2007 and is operated by Cheng Lie Navigation, a subsidiary of CMA CGM Holding. It is owned by Germany's Leonhardt and Blumberg, according to IHS Markit’s Maritime Portal.

Source IHS
10  Shipspotters all over the world / Shipping News and information / Re: MONGOLIA (IMO 9041069) on: January 16, 2018, 06:36:41 am
She is sold to Asset Management Corp Nigeria.This company is a subsidiary of Group: Nigeria Govt.She is underway to Lagos.She is now passing the coast of Potugal.The time of arrival is ETA 05 Feb 2018, 08:00 UTC.

Rgds
Hannes.
11  Shipspotters all over the world / Shipping News and information / Evergreen orders 20 container ships on: January 16, 2018, 06:23:32 am
Taiwanese liner operator Evergreen Line has confirmed that it will acquire 20 container ships, each with 11,000 teu capacity. Of the total, 8 will be newbuildings and 12 will be taken on long-term bareboat charter.

In a filing to the Taiwan Stock Exchange, Evergreen said that two wholly owned subsidiaries, Greencompass Marine and Evergreen Marine (Hong Kong), would each be the registered owner of four of the newbuildings. These two subsidiaries will also be the charterers of the other 12 vessels, with these ships to be equally allocated to the entities.

Evergreen said it had shortlisted compatriot shipbuilder CSBC Corp, Japan’s Imabari Shipbuilding and Japan Marine United, and South Korea’s Hyundai Heavy Industries and Samsung Heavy Industries, of which just one would be chosen to build the ships.

With regard to the chartered-in vessels, Evergreen would not say if these were in-service ships or new vessels to be contracted on the back of long-term timecharters.

Media reports have, however, tipped Imabari as being likely to win the contract, as in 2015, Evergreen had ordered 11 18,000 teu ships through the Japanese shipbuilder’s shipowning arm, Shoei Kisen Kaisha, for long-term bareboat charter.

The 12 ships that will be taken by Evergreen on bareboat charter, if these are newbuildings, are thus likely to be head-owned by Shoei Kisen Kaisha.

Each ship is estimated to cost USD93–100 million.

According to IHS Markit’s Maritime Portal, Greencompass Marine is the registered owner of 30 of Evergreen’s ships, including 10 2,900 teu ships that are being built by CSBC Corp for delivery from 2017 to August 2018. The rest of Greencompass Marine’s ships were built from the late 1990s to 2000. Evergreen Marine (Hong Kong) is currently the registered owner of Uni-Accord, a 1997-built 1,164 teu ship that was purchased in 2003.

Evergreen Marine Corp emphasises that the aim of these newbuilding programmes is to meet future market demand and to continue with its ongoing fleet renewal.

“With the delivery of the new ships, Evergreen will redeliver older chartered vessels upon expiry of their charter periods to help optimise the efficiency of its operating fleet and enhance the competitiveness of its services,” Evergreen said in a statement.

IHS Markit has forecast that global container trade will expand by 4.9% in 2019 and the global fleet will grow by 5.6% if one-quarter of the 78 mega container ships (exceeding 10,000 teu), totalling 1.2 million teu, due for delivery, are delayed.

COSCO and Yang Ming have delayed the delivery of 200,000 teu ships from 2018 to 2019, due to overcapacity. This means that 10% of the capacity originally meant to hit the water this year has been deferred.

IHS Markit data show that Evergreen has the world’s seventh-largest fleet, standing at 1 million teu, and its orderbook, if the 12 ships are newbuildings, makes the company the largest, at 567,000 teu. If the 12 ships are not newbuildings, Evergreen’s orderbook would be the third-largest behind COSCO and CMA CGM at 435,000 teu.

Source IHS
12  Shipspotters all over the world / Shipping News and information / Re: SM Line to remove four ships from Indonesia services on: January 04, 2018, 09:08:10 am
I think only for Container vessels Mr Husni.
13  Shipspotters all over the world / Shipping News and information / SM Line to remove four ships from Indonesia services on: January 04, 2018, 08:59:59 am
SM Line is to withdraw four vessels from its services to Indonesia as Korea Shipping Partnership (KSP) member companies begin to streamline their services to avoid duplication.

Set to begin operations in the first quarter of 2018, KSP is a quasi-alliance of local liner operators looking to restore confidence in South Korean shipping companies after a series of highly publicised crises.

The alliance comprises Hyundai Merchant Marine (HMM), SM Line Corporation, Heung-A Shipping, Dongjin Shipping, Sinokor Merchant Marine, Hansung Line, Pan Continental Shipping, Namsung Shipping, Korea Marine Transport Co., Ltd, Pan Ocean, CK Line, Dongyoung Shipping, Doowoo Shipping, and Taiyoung Shipping. The Ministry of Oceans and Fisheries (MOF) and the Korea Shipowners’ Association promoted the alliance, which will operate intra-Asia services.

Currently, six South Korean liner operators operate 20 ships in five services to Indonesia. Consequently, one of these services will be eliminated.

HMM, Korea Marine Transport Co, Ltd, Sinokor Merchant Marine, and Heung-A will continue to deploy vessels to services to Indonesia.

Backed by the Samra Midas Group, which also owns Korea Line Corporation and Korea Shipping Corporation, SM Line was established by Samra Midas Group to acquire the trans-Pacific and intra-Asia portfolios of the now-defunct Hanjin Shipping, the country’s once largest shipping company that went bust in February 2017.

The MOF said in a statement that the streamlining will also affect services to Thailand and Japan, which will see the removal of seven ships.

Heung-A vice-president Lee Hwan-gu said, “Following the first round of the realigning of the routes, the shipping companies’ operating costs can expect to be reduced.”

Three of the ships that will be removed will be redeployed to services to China and Vietnam as the KSP member companies believe these markets have more growth potential.

MOF’s director for shipping and logistics, Eom Ki-doo, said, “It’s very encouraging that the companies are progressing in their voluntary reorganisation and we hope that they can co-operate in other areas in the future.”

Source IHS
14  Shipspotters all over the world / Shipping News and information / Judge acquits Seaman Guard Ohio crew of all charges on: November 28, 2017, 03:04:34 pm
The crew of the floating armoury Seaman Guard Ohio have today been acquitted of all charges by the Maduria bench of the Madras High Court, after spending four years in jail.

The 35 seafarers and security personnel were detained aboard the Sierra Leone-registered floating armoury ship by police in Tamil Nadu in October 2013 after it was claimed they had entered Indian territorial waters for bunkering. The police accused the crew of carrying unregistered weapons and making an illicit money transfer for the bunkers. The Q Branch of the Tamil Nadu police, which originally took up the investigation, charged the crew members under a number of acts, including the Arms Act, Indian Penal Code, and Essential Commodities Act.

The crew were convicted in January 2016 and sentenced to five years of “rigorous imprisonment”, a surprise outcome as the charges had previously been overturned and the men freed. Including the first six months the crew were imprisoned, they have served half of the five-year sentence.

On Monday, Judge Bashir Ahmed pronounced the acquittal, stating that the prosecution had failed to prove the coastguard had intercepted the vessel within the territorial water of India.

The acquittal has been welcomed by families of the crew, who had previously expressed concerns over the judge's understanding of the complexities of the case: he had previously recused himself on 5 October before returning to the case on 12 October.

A social media post from the families of six British men working as security guards on Seaman Guard Ohio said that “justice had prevailed” and they will now wait to hear “as and when” the men will be allowed to return to their families. 

Stephen Askins, a partner in UK law firm Tatham Macinnes, who has worked on the case for the past four years, told Fairplay sister title Safety at Sea that the next steps would be to get the men out, “which should happen in a day or so”. There is only a “residual risk” that the Indian government will appeal the acquittal, he stressed, adding that details of the judgment would be released tomorrow, “which will give us greater insight”.

Meanwhile, the charity Mission to Seafarers, which has provided support to the crew, said the decision marked “the end of a traumatic four-year period spent in captivity since their arrest in 2013”. 

Ben Bailey, director of advocacy at Mission to Seafarers, said that the Seaman Guard Ohio case  highlighted the risks that “millions of seafarers often face when carrying out their everyday jobs”. “The criminalisation of seafarers remains a constant threat to those who are responsible for transporting over 90% of world trade,” he added.

The International Transport Workers’ Federation (ITF) has also provided support for the crew since their arrest in 2013 and helped fund the appeal on their behalf. ITF seafarers’ section chair David Heindel said that while at last there was “some form of justice”, one “glaring injustice remains: the scandal of AdvanFort [the owner of Seaman Guard Ohio] getting off scot free, having washed it hands of its employees”. He added: “They took the money, they sauntered off, pockets bulging. It is nothing short of shameful that our justice system allows them to get away with this.”

The Seaman Guard Ohio case has also been used as a key example of the risks of unregulated floating armouries, with the Indian government and others in the shipping industry calling for tighter regulations.

In May 2018, the IMO’s Maritime Safety Committee (MSC) 99 will discuss progress on the possibility of developing an international regulatory framework for floating armouries.

Source IHS
15  Shipspotters all over the world / Shipping News and information / Crude oil tanker oversupply manageable, but should be eliminated on: November 04, 2017, 04:54:28 am
The tanker market is oversupplied by about 30 to 40 VLCCs and 20 to 30 Suezmaxes, but the sooner this can be eliminated, the sooner freight markets will recover, Paddy Rodgers, CEO of the Antwerp-based tanker giant, Euronav, told Fairplay.

“If we can see our ‘bathtub’ move into a better balance via a net reduction in the global fleet then the inflection point in the cycle will come quicker,” Rodgers said.

By the bathtub he referred to the age profile of the VLCC and Suezmax fleets. Most of the tonnage is modern, which gives the profile a high and broad bulge above a narrow base that represents ageing vessels.

The same applies in reverse to the newbuilding orderbook, as most of the crude oil carriers are due to enter service in the next two years, with little supply due after that year.

As far as VLCCs are concerned, Euronav expects 48 deliveries in 2018 followed by 33 the following year. In the case of Suezmaxes, the figures are 33 and 9 respectively.

Neither the oversupply nor the orderbook appear huge when compared to the existing fleets in these two size categories.

Figures from the IHS Markit database show that there are 716 VLCCs with a combined dw tonnage of 220.0 million currently in service and that the present day Suezmax fleet consists of 515 ships that have a combined tonnage of 80.3 million dwt.

The demand for crude oil remains robust. Euronav pointed out in its third-quarter interim report that the IEA had raised its 2017 global oil consumption growth forecast to 1.6 million bpd from 1.2 million bpd during the course of the year.

The company has calculated that the 1.6 million bpd growth in demand creates work for 49 VLCC equivalents, whereas the 1.2 million figure only brings work to 37 units.

Euronav has based its calculations on factoring the carrying capacities of VLCCs and Suezmaxes into a synthetic concept of VLCC equivalents to facilitate projections of future tonnage need and supply.

Despite the current benign demand situation, removal of ageing vessels remains high on the agenda of the Euronav top brass as Hugo de Stoop, CFO, stated in the company’s third-quarter interim conference call. “If the market becomes considerably better, that will absorb the new tonnage little bit faster but we continue to insist on saying that the old ladies can go,” he said.

Likewise, owners should refrain from ordering tonnage that would be surplus to requirements. “The duration of a challenging freight rate environment will remain dependent on the number of additional newbuild orders that are not needed by the market,” Euronav said in its third-quarter interim report. “Scrapping/fleet removal trends need to be extrapolated further before an inflection point can be reached.” 

Continued high pace of newbuilding orders combined with a slowdown in demolition sales, could in an extreme case, have very negative consequences. The present low freight rates result from oversupply of tonnage, not weak demand.

However, should the global economy start to encounter headwinds and the demand for oil weaken, the tanker industry could steam into the next recession with a vast oversupply of tonnage, according to Rodgers.

“Again, anything is possible and clearly demand will be impacted the higher the oil price goes; we think it remains demand stimulative to around USD70 per barrel but the recent rise has been based on strong demand as well as restricted supply.”

Source IHS
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