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The numbers in tanker shipping so far

The numbers in tanker shipping so far
The tanker shipping market is arguably the best performer among the different segments of commercial shipping under present market conditions. Since the plunge of oil prices in the final quarter of 2014, tanker freight rates have climbed up and the previously excessive tanker tonnage are getting absorbed on greater demand.

How has the ‘addition-deletion’ equation of tanker vessels worked itself out over the course of this year? A Mid-Year Tanker Supply Update by McQuilling Services, published on 31 August, shared that new ships hitting the water have outpaced those that left the trade.

As at 31 July 2015, 73 newbuild tankers were delivered, among which 10 were VLCC newbuildings, eight suezmaxes, 12 aframaxes, 11 LR1s and LR2s, and 32 MR1s and MR2s.

While deliveries in the suezmax sector have picked up from last year (four delivered through July 2014), the number of new aframax deliveries has outpaced the year-ago number by six, according to data compiled by McQuilling.

“Over the past two years, we have seen negative fleet growth in the aframax sector, but this year is clearly moving in the opposite direction. Meanwhile, no panamax deliveries have been recorded as this class lacked any orders from 2012-2013,” the analyst said.

The MR2 market continues to lead the way in terms of newbuilding deliveries as 26 MR2 vessels joined the global fleet, while the MR1s have seen far less deliveries as just six were recorded.

On vessel exits, the pace of scrapping has slowed considerably year-on-year as just 18 ships left the market in the first seven months of this year, compared to 50 the previous year.

“The decline can be attributed to a stronger spot market and weaker scrap prices, which is reducing the incentive for owners to send their vessels to the breakers,” McQuilling noted.

In the VLCC segment, four exited the trade through July, of which two were sold for conversion. Conversely, zero ships exited the suezmax and LR2 trading fleet so far this year, it was observed.

Aframax deletions dropped to just two compared to 17 the previous year, and panamax and LR1 each saw two units got deleted. A further two MR2s disappeared from the market and MR1s have seen the most exits out of all of the vessel classes, tallying six through July.

In terms of newbuilding orders, 136 vessels were ordered through July compared to 127 in the same period of 2014. The bulk of these orders has stemmed from the dirty segment of 42 aframaxes, followed by 33 VLCCs, 29 suezmaxes, and one panamax.

In the clean tanker segment, newbuilding contracting has been led by 20 LR1 orders, followed by five MR1s, four LR2s, and two MR2s.

“Newbuilding orders for dirty tankers have clearly dominated this year’s orderbook, which is a notable change from what we’ve seen in recent years,” McQuilling said.