LOGBOEK  - JOURNAL DE BORD

Single-hull scrapping forecast to shrink VLCC fleet

Martyn Wingrove - Thursday 21 January 2010

THE global fleet of very large crude carriers was forecast to shrink for the first time in seven years, as more single-hulled tankers are scrapped than new vessels delivered, writes Martyn Wingrove .

Belgium-based Euronav’s chief financial officer Hugo De Stoop said this meant the tanker owner had an optimistic outlook for tanker rates.

“If we have the first negative growth in the world fleet since 2003 and the world economy continues to recover, we could be on for a very good year.”

He said the current rates turnaround signalled a positive start. “In the last two days we were booking at $100,000 per day up from $75,000 per day the week before,” he said. “The $100,000 mark is always a number that blows the mind of many people including us.

“Rates could last at high levels, maybe not at $100,000 per day, but at very good rates for the year.”

Euronav operates 24 VLCCs and its breakeven levels are $36,000 per day, Mr De Stoop said.

He said the single hull tanker phase-out, under the International Maritime Organization’s guidelines, was being implemented more rapidly than expected.

According to London brokers Gibson there are 536 VLCCs in the global fleet and 186 on the orderbook for delivery to 2012. There are 73 single-hulled VLCCs in the fleet and 66 newbuildings due to be delivered this year, Gibson analysts said.

“Compared with other shipping sectors, such as capsize bulk carriers, the VLCC orderbook looks more healthy. It is probable that the fleet will shrink, but it comes down to how many will be scrapped,” said a Gibson analyst.

“Scrapping prices are looking good and if spot rates come down, more VLCCs will be scrapped.”