Page 21: of Maritime Reporter Magazine (February 2, 2005)

February 2005 21

Spot Market

Summer came to a close and rates were expected to drop before winter blew in with full force. Rates instead began to increase quickly, slowing for a bit in October then gaining momentum in November. Rates hit a yearly high when the Sunlight Jewel (1993 built 280,000 DWT) was reportedly fixed by

Marathon in November for WS 240 ($177,000/day). The average earnings per day in November for an AG/USG

Route was $153,000/day, tripling

November's average from 2003. But what goes up must eventually come down, rates began dropping in

December , as cargoes thinned out and hesitation for what 2005 may bring began to stir, Marathon fixed the Safwa (2002 built 303,000 DWT) for WS 130 (89,000/day). Vessels going East also saw a dramatic jump in rates the fourth quarter. Rates peaked in the low

WS300's, ExxonMobil fixed the Arosa (1993 built 291,000 Dwt) for WS 315 ($226,000/day). As each week passed in

December rates dropped lower and lower, averaging for the month at about

WS 150. West Africa rates also spiked in

November with rates over WS300, but rates dropped off quickly in December to WS 160. Koch fixed the Astipalia (2001 built 306,000 Dwt) for WS 165 ($107,000/day).

Newbuilding & Secondhand Sales

In 2004 the newbuilding market prices continued their upward climb, hurdling over the $100M mark in the third quar- ter and closing at an average $110M for the fourth quarter. Since the close of 2003 the newbuilding sales price has increased over 40%. Two of the record second-hand sales included Metrostar's purchase of the 2002 built Oriental

Topaz (319,430 Dwt) for $116 million and the 2003 built Violando (309,234

Dwt) from Goulandris for $122.5M. Dr.

Peters jumped right into the action with the purchase of two sister ships from

Pacific Star, the 1998 built Neptune

Glory (299,127 Dwt) and the Saturn

Glory (299,127 Dwt) for $88.5M each included a charter back to seller for 7 years at $41,760/day. Arlington Tankers, a new public tanker company set up by

Stena acquired 2 Concordia V-Max tankers for $120M each, the 2001 built

Stena Vision and Stena Victory (314,000

DWT). The Clipper Group and Fred

Cheng's Shinyo International have creat- ed a joint venture called Van-Clipper, which has already agreed to purchase two vessels the 1988 built Seryna (240,000 Dwt) and 1992 built Astro

Lynx (244,000 Dwt).

Fleet Additions & Deletions

The VLCC demolition market came to a complete standstill during the third quarter spilling over into the fourth quarter with increasing spot rates entic- ing owners to hold onto their vessels.

Even with high available scrap prices owners chose to stay in the spot market.

The demolition market has steadily decreased over the last three years. In 2002 a record 44 VLCC vessels were scrapped, decreasing to 29 in 2003. In 2004 a mere 12 VLCC vessels were scrapped, down nearly half since 2003.

Although the demolition market quieted down the last quarter the VLCC deliver- ies remained steady with 7 VLCC ves- sels delivered the fourth quarter bring- ing the total deliveries to 30. The Delos (306,000 Dwt) delivered this month and was also sold this quarter to Ghandour by Aeolos for $125M. With 30 vessels delivered and 12 vessels departed, the net trading inventory of VLCC's increased by 18 vessels to 444. Going forward, a substantial orderbook exists and minimal mandated scrapping under

IMO 13G promises a similar fleet build in 2005.

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Tanker Market Snapshot • VLCC

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