Record High Deliveries Threaten Tanker Shipping Market
A record high crude oil tanker delivery amounting to 5.5m dwt in January has instantly threw the sector's demand-supply out of balance and put pressure on freight rates, according to a latest report by Bimco.
According to MANA, he "unprecedented scale" of 5.5m dwt in crude oil tanker capacity represented a 220% surge compared to the delivered tonnage recorded in January 2016, according to Bimco's chief shipping analyst Peter Sanding, citing data from VesselsValue.
The tonnage delivered in January 2017 alone already accounted for 22% of the crude oil tankers previous year's total deliveries.
"This record high crude oil tanker delivery growth is troubling, and worsens the balance between supply and demand instantly, due to sluggish demolition in this segment," Sand said.
From January 2014 until January 2017, demolition amounted to only 8m dwt, representing a very small proportion of 2.2% of the current crude oil tanker fleet.
The lion's share of January deliveries was taken by 12 VLCC deliveries totalling 3.68m dwt. Additionally, 943,000 dwt of suezmax capacity and 903,500 dwt of aframax capacity were delivered.
In an earlier Bimco report on the tanker shipping market outlook, it was mentioned that prospects are grim due to the anticipated inflow of fresh tonnage and reduced crude output from Opec expected to put pressure earnings for operators.
“2017 and 2018 are set for significant capacity to be delivered while the demand side eases,” he said. In 2016, crude oil tanker fleet capacity rose by 5.7% year-on-year and oil product tanker fleet expanded by 6.1%.