Gibson Long Term Tanker Market Outlook 2017

  • ID: 4316566
  • Report
  • 58 Pages
  • E A Gibson
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The Tanker Fleet Continued to Grow Rapidly During the 1st Five Months of 2017

This study covers the outlook for the tanker market over the next five years. The findings are based on the forecast balance between future tanker supply and demand, following the detailed analysis of fleet prospects, world crude production and crude and products trade. The report discusses in detail market developments in all tanker segments above 25,000 deadweight and conclusions are made on the future direction of freight rates up to 2022. Our methodology of calculating tanker owner’s daily earnings captures the highest possible returns based on current and forecasted market conditions.

Tanker trading conditions deteriorated in the 2nd half of 2016, most notably in the product tanker market, where spot earnings across all clean tanker categories frequently declined to or even below the level of fixed operating expenses. Crude tanker earnings also moved to lower levels; however, on an annual average basis, TCE returns still remained generally healthy in 2016, well above the lows witnessed in 2009/2013.

August 2017 update: This report has been revised to reflect the IMO’s decision to delay the implementation of the ballast water management convention (BWMC), and other recent developments affecting the tanker market. Owing to the high cost of retrofitting a tanker to comply with the BWMC, the convention has major implications for tanker scrapping activity, which in turn affects the freight rates and tanker earnings. As a result, this report has been extensively revised the reflect the fact that, by delaying the BWMC, scrapping activity will be lower than previously estimated, and thus freight rates may be lower than previously estimated.

Please note that this report comes with a complimentary year-long subscription to the publisher's Weekly Tanker Market report, which will provide a weekly summary of activity in the crude and product tanker markets, a summary of freight rates and a topical cover story highlighting key developments/trends in the crude and/or product tanker market. This report is published weekly on a Friday and emailed to the client directly.

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1. Introduction
 
2. Executive Summary
2.1 General Overview
2.2 The Crude Tanker Market
2.3 The Product Tanker Market

3. Recent Market Developments
3.1 Developments in the Crude Tanker Market
3.2 Developments in the Product Tanker Market
3.3 Piracy
3.4 Panama Canal

4. New Tanker Orders And Deliveries
4.1 New Tanker Orders
4.2 Actual and Scheduled New Tanker Deliveries
4.3 Potential Changes to Scheduled New Deliveries

5. Tanker Scrapping
5.1 Recent Scrapping Activity
5.2 Scrap Prices
5.3 Fleet Age Profile
5.4 Ballast Water Management
5.5 Emission Control Areas
5.6 Global Sulphur Limits
5.7 Scrapping Profile Forecast

6. Tanker Supply
6.1 Total Fleet Prospects
6.2 MR fleet (larger MR and Handy)
6.3 LR1/Panamax fleet
6.4 Crude Aframax/LR2 fleet
6.5 Suezmax fleet
6.6 VLCC fleet 

7. Crude Tanker Demand
7.1 World Oil Demand
7.2 Crude Tanker Demand - East of Suez
7.3 Crude Tanker Demand - Atlantic Basin
7.4 Tanker Operational and Forced Storage Demand
7.5 Outlook for Crude Tanker Demand

8. Crude Tanker Spot Rates And Earnings Outlook To 2022
8.1 Crude Tankers - Spot Earnings
8.2 Crude Tankers - Spot Worldscale Rates

9. Product Tanker Demand
9.1 West of Suez Product Trade 
9.2 East of Suez Product Trade
 
10. Product Tanker Spot Earnings And Rates Outlook To 2022
10.1  Product Tankers - Spot Earnings
10.2  Product Tankers - Spot Worldscale Rates 

11. The Time Charter Market
11.1  Crude Tankers
11.2  Product Tankers

12. Newbuilding And Second-Hand Prices
12.1  Crude Tankers
12.2  Product Tankers

Appendix - Outlook For Spot Tanker Earnings And Charter Rates 2010 To 2022

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The global tanker fleet returned to rapid growth last year. Strong investment in new tonnage in 2013/2015 meant that actual and scheduled deliveries across nearly all segments rose sharply in 2016 and are expected to remain at high levels through to the 1st half of 2018. The developments in the MR supply are different as the surge in new orders occurred earlier, in 2012/2013. Due to modest ordering in more recent years, the pace of new MR deliveries started to slow down in late 2016. A further decline is expected going forward, with deliveries falling to minimal levels in 2018.

Tanker demolition was limited in 2015/2016 due to a young fleet, healthy industry earnings for most of the period and low bunker prices, reducing downward pressure on the least fuel efficient ships. Over 80% of the global tanker fleet is less than 15 years of age, while around one quarter is in the 11 to 15 years age group, indicating a notable increase in a number of natural candidates for demolition in the medium term.

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