New York: South Korea has lost its lead as the top discharge destination for single-hull tankers, to India, according to statistics from New York broker Poten & Partners. Following the December 2007 Hebei Spirit incident, in which 75,000 barrels of crude oil were spilled into the Yellow Sea causing more than $500m in damage, the South Korean authorities tightened their regulations, accelerating their ban on single-hull tankers from 2015 to 2010. The United Arab Emirates followed suit.
Poten statistics show that in 2007, South Korea was the top destination for laden single hull tankers, with 182 cargoes delivered there over the course of the year. However, in this year-to-date, India now heads the list, with 53 such cargoes, followed by Thailand (46), Taiwan (33), with South Korea in fourth place, notching up just 27 single hull cargoes so far.
Total single hull deliveries have fallen sharply, from the 2007 figure of 699, to 188 so far this year. However, Poten warns that 2009 "is not shaping up to be the pivotal year as many had expected regarding the single hull fleet". Ship owners had hoped that the removal of large numbers of ships would shore up freight rates and asset values, the broker points out. But, it says, "the removal of this fleet may not be the immediate boon to the market as some had hoped".
IMO's current regulations ban single-hull tankers from trading after 2010 or when they reach 25 years of age, but allow them to continue in operation until 2015 with permission from port states and approval under the Condition Assessment Scheme. But, as Poten points out, the economics that support the continued trade in single hull tankers are being seriously tested. In this market, charterers can pretty much pick whatever tonnage they like, and the spread between modern double-hulled tonnage and older single-hulled units has narrowed sharply as the market has fallen. Why would they choose to charter single-hull tankers when they can have modern double-hulled units for practically the same price? [28/09/09]
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