No large tanker newbuilds ordered in over a year

According to New York broker, Poten & Partners, the last VLCC contract was placed in June 2021, followed a month later by the last Suezmax order. No new panamax tankers or LR1 tonnage have been ordered since April 2020 and only six Aframax/LR2s and seven MRs have been ordered so far this year, the broker said.

The tanker market is fraught with uncertainty. Not only do owners face prices up by close to 20-30% on first-half 2021 prices, but there is uncertainty on propulsion type and, of course, bigger questions about the future of tanker shipping generally as the world’s decarbonisation drive becomes more urgent.

“There is the general expectation that global oil demand (and its transportation) will likely peak within the nest 10-20 years,” Poten said in its most recent weekly Tanker Opinion.

For a shipowner, that is not a strong incentive to invest in an asset that has a 20-year life. Especially, if (in the case of a VLCC) it is 28% more expensive than last year and you won’t get it delivered for at least another two years.”

That explains why tanker owners are targeting secondhand tonnage. A secondhand tanker is cheaper (in relative terms), Poten said, and can be employed in today’s rising market immediately.

Noting that Greek and Chinese owners have been particularly active as both buyers and sellers, the broker said: “Buyers want to expand or renew their fleet to take advantage of rising rates, while sellers see an opportunity to shed older assets at attractive prices and/or realise some gains on previously acquired tonnage.”

Source: https://www.seatrade-maritime.com/tankers/no-large-tanker-newbuilds-ordered-over-year