* LNG shipping rates to improve from 2018
Crude oil tanker deliveries reached a record high in January as 5.5 million dead weight tonnage (dwt) of the capacity entered the fleet this year, representing an increase of 220 per cent from January 2016.
An international maritime consultancy firm, BIMCO in its preliminary data from VesselsValue said the month already accounts for 22 per cent of the previous year’s total crude oil tanker deliveries.
In comparison to the totals of 2015 and 2014, this 2017 figure amounts to 48 per cent and 51 per cent respectively. In terms of crude oil tanker deliveries of 2.5 million dwt, January 2016 hit record levels in relation to the previous two years. However, that level has been dwarfed by the tremendous amount of deliveries in the first month of 2017.
BIMCO’s Chief Shipping Analyst, Peter Sand, said: “This record-high crude oil tanker delivery growth is troubling, and worsens the balance between supply and demand instantly, due to sluggish demolition in this segment,”
From 2014 until 2017, demolition amounts to only 8 million dwt, which represents a small proportion of 2.2 per cent of the current crude oil tanker fleet.
“This development in January highlights the fact that the crude oil tanker market faces headwind for the current year already,” Sand added. VesselsValue data showed that the lion’s share of January deliveries was taken by 12 very large crude carrier (VLCC) deliveries, which totals 3.68 million dwt and represents 67 per cent of the month’s total.
Meanwhile, Liquefied natural gas (LNG) shipowners are facing a tough period as rates are expected to remain under pressure during 2017, according to shipping consultancy Drewry.
This year has started on a positive note for LNG shipowners as spot rates have firmed up to the West of Suez because of seasonal demand for LNG, raising hopes that the momentum in rates will continue.
However, Drewry reiterates its outlook that the fundamentals of LNG shipping market “are not strong enough to sustain this recovery for long. Soon rates will come under pressure as seasonal demand wanes from April onwards.”
Moreover, this year the LNG fleet is forecast to grow at its fastest pace in five years at 13 per cent, surpassing anticipated LNG trade growth of 7 per cent. Therefore, the worst is not yet over for LNG shipowners as spot rates will remain under pressure at an average of around $36,000 per day East of Suez in 2017.
Drewry’s lead LNG shipping analyst, Shresth Sharma, said: “Although the short-term outlook for this year is weak, we remain bullish about the medium and long-term outlook because of expanding worldwide LNG export capacity,”