Page 53: of Maritime Reporter Magazine (March 2018)

world yearbook

Tanker © Stockninja/Adobe Stock

Statistics & Analysis Courtesy of VesselsValue.com

The crude tanker markets remain de- markets is due to the lingering effect of pressed due to the oversupply of tonnage new build additions to the ? eet over the in the VLCC and Suezmax segments. past several years. Arbitrage trades for

VLCC Returns vs. MRs

The low hire rates for these ships ? lters clean products have an outsized impact down to smaller crude tankers, who are on the rate strength seen. Upcoming ad- unable to push market rates too high ditions to global re? ning capacity and during sensitive rate windows. Char- the steady rise in product demand should terers can simply book the larger ships boost the cargo volumes available to all for the same amount of money, which clean tanker segments. caps gains. The shifts in global crude Tanker valuations are a mixed bag. production due to shore-based produc- Ships from zero to ? ve years in age have tion (i.e. shale or other novel production rebounded in value as market partici- techniques) is bene? tting smaller crude pants have snapped up younger units at tankers. Many of these volumes can be bargain prices in the Sale and Purchase shipped opportunistically from ports that market. Older ships have not fared as have not traditionally serviced VLCCs well, particularly for large crude tankers. or Suezmaxes. The demand for distil- VLCC values for ships between 10 and lates to blend low sulfur bunker oils will 15 years of age saw a signi? cant drop create new trade ? ows to service key from a year ago. global refueling points. The reduced trading options for these

Clean tankers are subject to the same vessels in todays low rate environment sentiment that faces crude tankers de- combined with the limited trading life spite wildly different fundamentals in over the next several years leaves fewer the markets. The market weakness, buyers willing to take a speculative posi- while not as pronounced as in the crude tion in ownership.

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