Tanker Owners Not About to Walk Away from New-build Contracts

Tanker Owners Not About To Walk Away From New-build Contracts
8, December 2008



Most of the tankers currently on order will be built and delivered, according to New York broker Poten & Partners. This is in marked contrast to the dry bulk market where analysts believe large numbers of bulk carriers will be seriously delayed or cancelled. However, tanker owners and investors are anxiously awaiting a clear picture on the order book, amid the recent chaos in shipping markets. Tanker values, however, have stood up reasonably well, with a "relatively low level of asset price correction compared to other sectors".

The fact that almost two-thirds of tankers due to be built in the coming years have been ordered at well-established yards, mostly in Asia and many of them publicly listed, indicates that future deliveries are more certain than in some other sectors. Moreover, says Poten, only about five per cent of the tanker order book has been contracted at so-called "Greenfield" yards - those considered least likely to perform in the new straitened global financial framework. Less experienced shipyards will experience temporary delays, Poten believes, but such delays will ultimately have a limited effect on the total capacity of the tanker fleet over the longer term. "More importantly," the broker says, "market sentiment has given little indication that ship-owners are itching to walk away from commitments.
Source: www.seatradeasia-online.com