McQuilling Services has released its weekly note today focusing on the very strong market showing of Aframaxes in the first half of 2008. The report featured half a dozen graphs and tables that describe a steady surge in freight and charter rates for the first half of the year.
According to the report, the average Aframax fleet additions since 2002 have been feared to oversupply the sector. However, with a 29% rate of underutilization, the highest across five tanker sectors, delivery delays and other supply issues, the sector has performed highly above expectations. Scheduled conversion projects have contributed to about 75% of total fleet exits since the beginning of the year. However, that is not enough to balance the present fleet additions, as 2008 is expected to be the year with the highest newbuilding deliveries since 1982.
The report also notes the February drop in fixtures is in line with the drop in the spot market rates in the same month. An increase in fixtures in the second quarter may, in part, explain the strength of the spot market during the same period of time. “ We have recognized that the year was heading towards an above average market levels but did not project the unseasonably strong second quarter of the year,” McQuilling said.
The demolition value of an Aframax tanker has increased from US $11 million in January, 2008 to US $15.8 million in June.
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