Demolition lags deliveries amid ‘mixed outlook’ for products (source: Tradewinds)
Just 16 ships taken out in opening three quarters of the year, Banchero Costa says.
October 25th, 2017 10:05 GMT
by Andy Pierce
Published in Tankers
Newbuilding deliveries in the products tanker market continue to run ahead of demolition in all sub-sectors this year, according to analysts at Banchero Costa.
It comes at a time when the brokerage says the outlook for the overall market is mixed.
Banchero Costa counts just 16 products tankers to have been scrapped in the first nine months of 2017.
The figure includes eight MR1s, four MR1s, and two ships each from the LR1 and LR2 arenas.
Given the limited demolition seen this year, the global products tanker fleet will swell by 5.5% in 2017, before slowing to 2.6% in 2018, the brokerage says.
“In the first nine months of 2017 deliveries have outpaced growth in all segments,” Banchero Costa says.
The LR2 market, where earnings have averaged just $9,100 per day this year, has seen the largest growth with the fleet rising by 5.1 million dwt, according to the report.
“Assuming 20% slippage, 153 new product tankers are expected to be delivered in 2017,” it added.
“The outlook for the product tanker market remains quite mixed in the medium term, with positive signs from the demand side in the short term, with unsure longer term demand growth, new refining capacity coming online in Asia and the Middle East, and many vessels expected to be delivered in an already oversupplied market.”