Tanker Orders Ramp Up in Q2

zoomIllustration; Image Courtesy: STX Offshore and Shipbuilding The second quarter of the year saw a total of 32 product tankers ordered as owners rushed to quench their thirst for newbuilding tonnage amid attractive asset prices. A total of 10 Handysize vessels and 22 Middle Range (MR) tankers have been ordered along with 18 Long Range (LR) 2 vessels, which corresponds to 2.4% of the product tanker fleet, according to Danish shipping company Norden. The crude order book recorded an intake of 17 Very Large Crude Carriers (VLCC),  a 2% of the segments order book. Hence, new orders in the crude segment kept crude order book at considerably high level. Overall, the accumulated ordering in tankers has been 15 million DWT in 2017, which is significantly more than in 2016. With respect to earnings, so far this year the MR product tanker segment has fared the best, with spot rates being above rates for both LR1s and LR2s. The flexibility and triangulation possibilities with MRs make earnings slightly more resistant during downturns in demand. The Handysize segment has experienced weak market rates during the second quarter due to limited demand in Europe and direct competition from the Aframaxes especially out of the Black Sea, Norden said. Strong vessel deliveries over the past year have kept tanker earnings at bay across the board. On the demolition side, BIMCOs data shows that a total of 1.3 million DWT of crude oil tanker capacity was sent to the scrapyards during the first four months of 2017, heading to the expected demolished capacity of 9 million for the full year. During the period, eight crude oil tankers were sent for demolition, including two VLCCs, two Suezmax, three Aframax and one Panamax, which is a good sign when compared to last years total of nine crude oil tankers.