Tanker Ship Owners Are on Consolidation Mode

As tanker freight rates are still reeling under the pressure of oversupply of tonnage, more and more tanker owners are entering consolidation mode, in a bid to improve economies of scale and avoid financial problems. In its latest weekly report, shipbroker Gibson said that “just before Christmas last year, the tanker market was greeted with the announcement of the proposed merger between two NYSE quoted tanker companies, Euronav and Gener8. At the time of writing this merger has still to be approved but, if the green light is given, the joint company will own 40 VLCCs and 28 Suezmaxes (incl. 4 newbuildings). Part of the deal includes the sale of 6 Gener8 VLCCs to International Seaways, another NYSE company which will raise their VLCC profile to 16 vessels. In a separate deal, concluded in March, DHT Holdings announced the acquisition of all 11 VLCCs from the BW Group (incl. 2 newbuildings). The BW Group promptly then placed an order in May for 4 VLCC newbuildings from Samsung HI for 2019 delivery at an attractive price. These were the only major “consolidation” deals concluded in 2017 in the large tanker sector. DHT had rebuffed several takeover proposals by Frontline earlier in the year”.

The London-based shipbroker added that “the beauty of the agreed deals is that both parties would grow their fleets without adding to the existing orderbook and as a result of clever acquisitions, bring down the age profile of their respective fleets. Euronav has a good track record of smart acquisitions without adding to the orderbook. In March 2015 the company purchased 4 brand new VLCCs from Metrostar. At the same time selling off the older units at good prices to keep the fleet modern. DHT has also been very active in this area too, selling off 5 units in November (all over 17 years of age) to reduce bank debt. Based on the VLCC fleet today (excluding VLCCs on order) and assuming the Euronav/Gener8 deal is ratified, Euronav will own 5.5% of the fleet, while DHT Holdings will own 3.2%. With the recent delivery of two units, Frontline now owns 3.0%, while International Seaways ownership could rise to 2.2%. Of course, consolidation has several strategic benefits for listed companies, as size does matter, making shares more liquid and more attractive to investors. Euronav’s acquisition of the Gener8 fleet will of course swell the Tankers International Pool at the expense of the VL8 pool, providing a stronger platform to counter the charterers”.

Meanwhile, “the VLCC supply is still dominated by the Asian giants such as China VLCC, Bahri and Cosco Shipping (CSET), with NITC’s share slipping. Apart from Euronav and NITC, all of the top ten owners have tonnage on order, which will swell the ranks by another 44 units. Maran, steadfastly remaining independent, will take delivery of 9 more VLCCs before the end of 2019. However, both China VLCC and CSET have substantial orderbooks, which will eventually give them an even more dominant position. The domination of the big fleets and the diverse ownership of the remainder of the VLCC fleet, most 10 units or less, is likely to limit any further consolidation in the short term”, Gibson said.

“The volatility experienced in the US stock market this week, pinned partly by concerns over the prospect of higher interest rates coupled with the current malaise across the tanker markets, heaps more pressure on beleaguered CEOs to keep the shareholders happy. With the prognosis of a tough year ahead for the crude sector, almost certainly, owners in the large tanker sector are unlikely to have further consolidation as a priority”, the shipbroker concluded.

Meanwhile, in the crude tanker market this week, Gibson said that it was“a much busier week for VLCCs…but that’s where the good news ended as the fresh demand was easily met by a solid wall of availability that remains standing as the very last of the February programme shakes out. Rates remained stuck within their lowest range of the year at down to ws 34 East for older units, and at no better than ws 40 for the most modern vessels with straight runs to the West at under the ws 20 mark. Chinese New Year commences later next week, and Owners will be hopeful of concentrated preholiday attention, though with March stem confirmations still to be awaited, there is no guarantee of that. Suezmaxes bumbled along with ballasting from the area not an economic option and a consequent easy tonnage list kept rates at down to 130,000mt by ws 62.5 to the East and to ws 26 West. No early change likely. Aframaxes trod water over the period with little/no support from the inter Far Eastern market either. 80,000mt by ws 85 still to Singapore, and nothing likely to shift that over the near term, at least”, the shipbroker concluded.

Source: Nikos Roussanoglou, Hellenic Shipping News Worldwide

Global Shipping Is On Course For Recovery In 2018, But All Eyes Are On Orderbooks

S&P Global Ratings believes that, in 2018, demand in the three main segments of the global shipping industry (dry bulk, tankers, and containers) will outstrip supply for the first time in several years. The lighter new vessel delivery schedule for 2018, compared with 2017, combined with our expectation of sustained imports of commodities, and longer distances travelled, point to rising charter rates across the shipping industry this year–with the exception of the container liner segment, which we forecast will see flat rates or a slight dip. What’s more, given the fundamental improvement in supply conditions, as signified by ship orderbooks being at close to all-time lows, we think recovery in shipping rates could continue beyond 2018. However, we see a risk that vessel owners, renowned in the industry for their historically poor supply discipline, could embark on an ordering spree in anticipation of better times ahead. This would disrupt the encouraging supply trend and constrain charter rates. But, assuming a typical lead-time from ship ordering to delivery of 18-24 months, we expect a slowdown in supply growth for at least the next few quarters, regardless of ordering activity.

While our base case assumes no major glitches on the demand side, underpinned by our firm 2018-2019 GDP growth forecast for all major contributors to global trade volumes, especially China, but also the eurozone and the U.S., all eyes are on the supply side and orderbooks, which will essentially shape the shipping industry beyond the likely solid 2018. If owners refrain from aggressive ordering and supply tightens further, we could see momentum in charter rates continuing into 2019. (Watch the related CMTV posted Feb. 13, 2018, titled “All Eyes On Orderbooks: Global Shipping Outlook For 2018”.)

We expect industry conditions to strengthen in 2018 for most of the 17 shipping companies we rate globally.
While improved supply conditions will likely prop up charter rates this year, a further recovery beyond 2018 will depend on prudent capacity management decisions by vessel owners.
Sustained global demand for commodities is essential for further improvement of dry bulk shipping rates.
We forecast a cyclical upturn for product tanker rates following soft rates in 2017, as the new vessel delivery schedule for this year is close to historical lows.
Given uncertainties in container liners’ maintenance of supply discipline, we forecast flat to slightly negative growth in freight rates in 2018.
Stable Outlooks For Most Rated Issuers, Due To Resilient Charter Rates
Our 2018 industry outlook, which points to generally resilient charter rates, mirrors our stable outlooks on the majority of rated ship operators. We rate 17 shipping companies globally (see table 1), two-thirds in the single ‘B’ category, following several negative rating actions over the past few years of industry downturn and unsustainable charter rates. Ratings stabilized in 2017, with positive rating actions outnumbering negative rating actions by ten to seven (see table 2). The vast majority of the seven negative rating actions were related to company-specific issues rather than industry conditions.

We view liquefied natural gas (LNG) shipping and passenger ferries as the most attractive shipping segments, because gas tankers typically operate under very long-term take-or-pay contracts with reputable counterparties, and ferry companies tend to face more stable demand and pricing, and lower capital intensity compared with conventional shipping. Container and dry bulk shipping are the most risky segments in our view, because of typically weak credit quality of charterers, among other factors.

Despite the overall stable outlook, a few downgrades and upgrades could follow in the next 12 months, as signified by the five negative outlooks or negative CreditWatch placements and two positive outlooks. The vast majority of negative outlooks and CreditWatch placements point to downside coming from developments unrelated to charter rate prospects, such as potential covenant breaches, increased financial leverage due to an acquisition, or a likelihood of downgrade of the sovereign rating.

Financing Difficulties May Keep A Lid On Fleet Sizes
We note a few impediments to a significant pick-up in new vessel orders, such as the generally stretched financials and borrowing capacity of vessel owners after several years of the industry downturn, and low appetite from lenders for shipping loans. Most European banks, traditionally the dominant ship financiers, have significantly reduced their exposure to the shipping industry, or even exited it completely over the past few years. We attribute the shift to internal considerations such as scarcity of bank capital, stricter regulatory capital rules, an escalation in restructuring of shipping debt, and a material weakening in the quality of banks’ shipping portfolios because of low vessel values. Funding has consequently become more scarce and selective and we expect this to remain the case during 2018. Chinese and Korean banks have stepped in to partly fill the funding gap because shipbuilding is important to their economies, but these lenders alone are unlikely to reduce credit scarcity for all ship operators.

Dry Bulk Shipping Charter Rates Should Continue Recovering In 2018
Dry bulk vessels move the raw materials of global trade–commodities such as coal, iron ore, and grain. For this segment, we forecast that demand growth will exceed supply growth again this year. A combination of supporting fundamentals bodes well for the dry bulk shipping rates in 2018, most importantly:

Rising iron ore, coal, and grain ton-mile demand. China, the world’s single-largest commodities’ importer, is bringing in additional volumes from more distant places than before, such as Brazil and North America, because of a pollution-focus-related shift to higher-grade imported commodities (most importantly iron ore and coal) and diversification of supply sources; and
A close to all-time-low orderbook. The dry bulk vessel orderbook currently represents about 8% of the global fleet (compared with around 80% 10 years ago), and is to be delivered over the coming two to three years, according to Clarkson Research.
The sector experienced a strong rebound in charter rates last year (from rock-bottom levels) because the growth in demand for commodities exceeded fleet expansion. For example, the average time charter rate for the benchmark Capesize ship was $15,000 per day in 2017, which was double the equivalent rate in 2016, according to Clarkson Research.

We expect fleet growth will trend markedly below last year, considering the muted new vessel delivery schedule this year, including the upside coming from non-deliveries, cancellations, and delays, which we assume will be 30%-40% of scheduled deliveries (the historical five-year average rate). We therefore forecast that demand growth will outpace net fleet growth, as long as China continues its firm imports of commodities to support its economy. We forecast GDP growth for China will only marginally soften to 6.5% in 2018 and 6.3% in 2019, compared with 6.8% in 2017. This level of GDP growth, combined with Chinese regulatory pollution targets that stimulate imports of high-grade commodities, should keep the global demand growth rate in a low-to-mid single-digit range. Accordingly, we forecast that vessel utilization rates and charter rates will continue recovering this year after a rebound in 2017. Our base case in 2018 incorporates an average rate for Capesize vessels of $17,000 per day and for Panamax vessels $12,000 per day. This corresponds to the respective industry average rates seen in the fourth quarter of 2017, as reported by Clarkson Research.

But Improving Rates Are Sensitive To Global Indicators
A significant drop in global trade volumes, a key engine of shipping growth, would be damaging to the industry. We forecast solid growth in developing, mainly Asian, economies will stimulate commodities’ trade in 2018, but there are evident risks in the demand outlook. A slowdown in commodity imports and consumption by China (by far the largest iron-ore and coal importer), in particular, would harm the dry bulk shipping industry, which heavily invested in new vessels a few years back believing in China’s ability to deliver a consistently solid economic expansion. Furthermore, any changes to Chinese regulatory policies, for example, tougher restrictions on heavily-polluting industries, such as the steel sector, may be detrimental to international commodity markets. A renewed weakness in commodity prices, reversing the recovery in prices in recent quarters, could also disrupt improving trade dynamics in Canada and most Latin American economies. Furthermore, if aggressive ordering unexpectedly resumes and scrapping (which slowed over the past quarters) does not offset this, it will interrupt the process of rebalancing the industry and keep a lid on dry bulk charter rates.

The Outlook Is Better For Product Tankers, But Crude Tankers Will Still Struggle
We see a cyclical upturn for oil-product tanker rates just around the corner, as the new vessel delivery schedule for 2018 is historically low. Crude tanker rates, on the other hand, will likely remain under pressure this year because of OPEC oil production restrictions and a spike in vessel orders in 2017.

Tanker rates declined further in 2017, from the already soft rates in 2016. This was the result of the accelerated delivery of new tonnage outstripping relatively stable tanker ton-mile demand. Demand was constrained by the reduced oil production by OPEC and non-OPEC exporters and by high oil and petroleum-product inventories, which suppressed export volumes.

In 2018, we expect supply growth for product tankers to noticeably slow, in particular for medium-range tankers. At the same time, demand should be enhanced by tightening oil product inventories, leading to an uptick in charter rates. Crude tanker rates will have to wait longer for a meaningful rebound. OPEC recently extended its production restrictions until the end of 2018 (with a review in June 2018), which will hamper oil supply. In addition, there’s a firm order book for larger crude tankers after an unexpected spike in orders in 2017. These orders were driven by attractive vessel prices, but did not take into account the weak rate conditions and gloomy prospects. And they will be only to some extent counterbalanced by enlarged vessel scrapping.

The Supply/Demand Balance Is More Fragile For Container Liners
Although the overall supply and demand conditions have shifted in favor of ocean carriers, with trade volume growth likely outpacing fleet growth in 2018, we remain cautious on the freight rates’ outlook. Average freight rates on major trade lanes recovered to more sustainable levels for container liners last year, thanks to decent trade volumes, supply-side measures (such as vessel scrapping and lay-up), and streamlining of networks after yet another wave of industry consolidation. However, significant deliveries of ultra-large containerships are scheduled in 2018 and beyond. These were ordered a few years ago by ship owners looking for economies of scale to be reaped from utilizing such ships. They will pose a threat to the recent rebound in freight rates, in particular on the main Asia-Europe lane (a home for mega-containerships), despite the likely favorable supply-and-demand industry balance in general. According to Clarkson Research, the current order book for post-panamax containerships–which have a capacity of more than 15,000 twenty-foot equivalent unit–may almost double the size of the global post-panamax fleet within the next two to three years.

Bearing in mind the persistent supply burden, freight rates will ultimately depend upon how prudent the leading container liners are in their capacity management decisions. Taking into account historically poor supply discipline, we see a risk that new orders will accelerate. We are alerted to the most recent orders of 20 mega box ships by industry leaders MSC and CMA-CGM. And, given the container liners’ traditional battle for market shares, new orders from other players may follow. In addition, the demolition of older tonnage remains a critical supply-side measure to help correct excess capacity and stabilize rates at commercially viable levels. However, we are mindful that the pace of scrapping has slowed in recent quarters. Given all these uncertainties, we forecast flat to slightly negative growth in freight rates in 2018, coming from the much-improved average rates in 2017.

Consolidation Has Reshaped The Container Industry And Could Lead To More Sustained Rates
During the next 12-18 months–after the most recent acquisitions have been integrated, shipping networks and customer platforms aligned, and cost synergies realized–we expect to see whether consolidation in the container industry, with capacity management decisions now in hands of fewer players, translates into more sustained profitability. The liner industry has been through a few rounds of consolidation over the past several years, as an answer to erratic rate movements and recurring operating losses, including the most recent acquisitions of Hamburg Süd by Maersk Line, United Arab Shipping Company by Hapag-Lloyd, and Neptune Orient Lines by CMA CGM. The consolidation led to a structural change of container liners’ competitive landscape so that the share of the top five players escalated to around 65% this year from 30% around 15 years ago. About half of the top-20 players were either absorbed by mergers or defaulted (Hanjin Shipping), and the gap between the larger and smaller players, as measured by their total carrying capacity, has markedly widened. What’s more, it appears that size in this industry matters, as reflected in the above-industry average EBIT margins reported by the largest liners, such as Maersk Line and CMA CGM, over recent quarters.

A more concentrated industry is normally more rational and efficient, but a risk of destabilization remains, with a background of historically aggressive capacity management by the largest players. Our base case assumes that, notwithstanding the consolidation efforts, the container liner industry will remain volatile because of its asset-intense, operating leverage-heavy, and network-based nature. But cyclical swings could be less pronounced and of shorter duration, and mid-cycle freight rates could trend above the operating cost breakeven. We note that the drop in freight rates toward the end of 2017, as the industry hit the seasonal trough, was followed by a quick correction in rates at the beginning of 2018, which could be a sign of more reactive capacity management and which we would normally expect from a more concentrated industry.

The Improved Supply/Demand Balance May Help Spot Operators Pass On High Bunker Prices
Because bunker (ship fuel) accounts for a large share of voyage expenses that ship operators incur, a shipping company’s profitability depends greatly on its ability to pass on higher fuel prices through contracts or hedging instruments. If oil prices were to trend markedly above our current assumptions (see “S&P Global Ratings Raises 2018 Brent And WTI Oil Price Assumptions,” published Jan. 18, 2018), the resulting higher cost of bunker could hamper ship operators’ cash flows, and wipe away the upside coming from more favorable supply and demand conditions, unless the cost inflation is successfully passed through to customers.

Typically, dry bulk-, tanker-, and gas-carrier operators are protected from rising fuel prices because they operate vessels under bareboat- or time-charter contracts, whereby the charterer pays the bunker fuel bill as per a contractual agreement. However, spot operators–which enter into short-term charters, often for a single voyage at market rates–as well as container liners and ferry operators bear fuel risk. In general, they find it difficult to pass on bunker cost inflation, particularly if the industry is oversupplied. But improved supply and demand conditions and vessel utilization should play in the ship operators’ favor this time around.

High bunker prices call for our close monitoring, with a current spot price in Rotterdam at a three-year high of $370 per ton according to Clarkson Research, compared with an average of around $300 per ton in 2017 and the three-year low of $100 per ton in January 2016.

A decision by OPEC to relax its oil supply control and increase production would likely prevent oil prices from rising, or even stimulate a fall in prices, and prop up consumption and international trade, which are key demand drivers for crude oil shipping. Most importantly, a low bunker price would support shipping companies’ profits across all segments, but particularly for container liners, given their largely fixed network cost base. That said, the current OPEC-led production cuts until the end of 2018 remain the key constraint to global oil supply. If there were further unexpected cuts and a resulting surge in oil prices, this would dent demand, disrupt trade, and have an adverse knock-on effect on the crude tanker segment, in particular, which has to absorb a flood of new tonnage delivered in 2017 and some to hit the water in 2018.

Environmental Regulations Will Add Costs Over 2019-2020
International regulations to be implemented over the coming two years will increase either capital or operating expenditure for ship owners. The shipping industry will have to comply with environmental regulations, such as IMO Ballast Water Treatment System (BWTS) from 2019 and IMO 0.5% Low Sulphur Limit from 2020. Measures to comply with the regulation include, for example, installation of BWTS and scrubbers or conversion of engines to use LNG as fuel, all of which will add to capital expenditure. Operators who don’t install scrubbers would need to run their fleet on a higher-cost low-sulfur marine diesel oil to be complaint, pushing up operating expenditure.

On the positive side, we anticipate that owners of older ships might view the necessary extra investment as economically unviable and send the aging tonnage to the scrap-yard through 2020, which would help to limit net fleet growth. Dry bulk ships, tankers, and containerships that are older than 20 years are close to the end of their useful life. Ships of such age account for 5%-7% of their respective global fleets, according to Clarkson Research, and are potential candidates for demolition by 2020, in our view.

Source: S&P Global Ratings

Posidonia Conference Programme gives pause for thought to global shipping leadership : Show’s biggest ever conference programme promises plethora of thought-provoking discussions

A diverse range of challenges and issues confronting global shipping will be tabled by industry leaders and debated by delegates at the most extensive Posidonia Conference Programme ever scheduled to take place alongside the Posidonia Exhibition at the Athens Metropolitan Expo from June 6-10.

With over 40 confirmed conferences, seminars, workshops and press conferences covering every aspect of shipping, organisers have expanded venue facilities to meet strong delegate demand. And with most presentation themes and titles echoing the global maritime community’s prime focus and key priorities, the conference programme looks set to be a highly coveted affair for the industry’s decision makers, analysts and the media.

The significance of the Posidonia Conference Programme for the global shipping community is underlined by the high profile presence of Lim Kitack, Secretary General of the International Maritime Organisation (IMO) at the Posidonia Opening Ceremony, who will also be delivering the key-note speech at the TradeWinds Shipowners Forum, which will be held on June 7. The Forum will address the most hotly debated issues including newbuildings, second-hand and demolition markets, investor sentiment and the paucity of finance, vessel valuations, the opportunities and risks of technology and the ‘connected’ ship. Delegates at the Forum will have the opportunity to hear the views of influential shipowners on topics as diverse as investments, acquisitions, commodity demand and the price of oil.

Later in the same day, at the Japanese Shipbuilding and Ship Machinery Technology Seminar, some of the world’s most profound experts in newbuildings from Japan’s shipbuilding industry will be sharing the latest technological innovations and modern machinery deployed to design and build vessels that are technologically superior and have advanced efficiency, safety and environmental standards. Remarks by Kazuo Tsukuda, President of Japan Ship Exporters’ Association (JSEA) and Motoyoshi Nakashima, Chairman of the Japan Ship Machinery & Equipment Association (JSMEA) will give attendees additional reasons to remain seated throughout the half day event following nine back-to-back specialist presentations from Nippon Paint Marine Coatings, Mitsubishi Heavy Industries, Japan Marine United Corp, Daihatsu Diesel, Yanmar and other household marine equipment makers from the country of the rising sun.


The oriental charm offensive will continue the next day, June 8, with the 2016 Korea-Hellenic Maritime Cooperation Forum, a new addition to the Posidonia Conference Programme. The Korean Embassy in association with IOBE, Greece’s Foundation for Economic & Industrial Research, will provide guests with a detailed look at the current situation and prospects of Korea’s shipbuilding industry through speeches by SEO Young-ju, Vice President of the Korea Offshore & Shipbuilding Association (KOSHIPA) and KIM Young-moo, Vice-Chairman of Korean Shipowners’ Association (KSA) as well as senior leaders from the Korea Offshore & Shipbuilding Association (KOSHIPA), Hyundai Maritime Research Institute, Korea Marine Equipment Association (KOMEA), Korean Register of Shipping, Korea Eximbank and others.

An issue of increasing importance due to ongoing discussions between the US and IMO on the framework pertaining to an internationally acceptable framework for the treatment of ballast water will be debated at the Ballast Water Management (BWM) Summit organised by Newsfront / Naftiliaki under the auspices of Greece’s Marine Technical Managers Association (MARTECMA). Under the title ‘Updates on BWM’, the summit will host the views of classification societies DNV GL, ABS, LR, Rina and BV and will conclude with an Argo Navis workshop on retrofit engineering studies and installation planning.

With constantly evolving regulation on various aspects of the shipping industry comes the need for classification societies to be ahead of the game and alert to any changes at any given moment. This is the job of the IACS Quality Systems Certification Scheme (QSCS) which helps classification societies effectively address current and impending shipping industry regulations and thereby assures shipowners and shipmanagers that IACS classed ships will be in compliance with current requirements but also that any impending requirements are identified in good time to enable calculated and measured decisions to be made regarding future compliance needs. Posidonia Conference delegates will be able to attend the IACS seminar to stay ahead of what’s coming from an international regulatory vantage point and how classification societies will best address the challenges.

And from international waters to North America’s Atlantic and Pacific oceans for a seminar titled ‘Trading in US Waters’ organised by the American Hellenic Chamber of Commerce under the auspices of the Embassy of the United States to Greece. The seminar will focus on the rules and requirements pertaining the navigation of ocean going vessels around US coasts and territorial waters in order to assist maritime stakeholders acquire a fully integrated approach to US requirements when visiting US ports.

‘Smart Ship Solutions’ is the title of the Posidonia Conference event that is organised by the Hellenic Marine Equipment Manufacturers & Exporters (HEMEXPO), an organisation which aims to offer shipowners integrated solutions based on Greek innovative technologies for vessels that are built or repaired all over the world. Some of the innovations to be presented are a split air condition unit for the demanding environment of marine applications by Psyctotherm, Prisma Electronics’ information intelligence platform LAROS, innovative coatings by Nanophos, Elvik’s incombustible materials and an engineering simulation by Feac which explores the design, performance and environmental impact of a vessel.

Solutions of a different kind will be presented at the 5th Analyst & Investor Capital Link Shipping Forum, which addresses the issue of access and availability of finance for shipping companies. Participants will exchange views on the shipping, financial and capital markets, private equity as well as investor attitudes towards shipping.

A practical roadmap towards the adoption of LNG as a safe, environmental friendly and viable alternative fuel for shipping, contributing to the development of a lower emission profile for the East Mediterranean marine transportation sector will be in the spotlight of the Poseidon Med II awareness seminar on June 7th. The 26 partners of Poseidon Med II from Greece, Cyprus and Italy will discuss LNG supply, technical and financial aspects of the LNG bunkering, raising awareness to the latest innovations and trends in the market.

Staying with the theme of green shipping, an international conference titled ‘Where is Shipping heading after COP21’ is organised by HELMEPA on Wednesday 8th June with an impressive array of speakers from the IMO, the European Commission, ICS, IACS, INTERTANKO, INTERCARGO and USCG. Following the adoption of the Paris Climate Change Agreement, last December, this conference will explore how international shipping can further contribute to global efforts to address climate change.

Not to be missed are the UKHO ECDIS seminars, which are designed to ensure that the navigational benefits of ECDIS are achieved in an efficient and compliant manner but will also demonstrate how ECDIS goes beyond compliance. Titled “Implementing ECDIS” and “Living with ECDIS”, the two seminars will take place every day from Tuesday 7/6 to Thursday 9/6 in the UKHO sponsored Posidonia Seminar Room 3.

Finally on Friday 10th, the last day of the programme, two more seminars will attract the interest of the maritime community present at the Posidonia 2016. The Hellenic Management Association will offer an interactive course titled ‘Master The Seas’ through a marine management framework designed by EFQM and The Carbon War Room will organise a panel discussion that explores the technological and financial opportunities for applying green solutions to the international maritime fleet.

The inaugural Young Executives Shipping (YES) Forum, sponsored by Posidonia, will highlight potential career opportunities in the maritime sector for young professionals and graduates, both at sea and ashore. The YES Forum aims at serving as an open and long-lasting dialogue among the principals and decision makers of the shipping Industry and university students.

Posidonia 2016 will be held from June 6 – 10 at the Athens Metropolitan Expo. The event is organised under the auspices of the Greek shipping community and the five major associations representing Greek shipping interests: Ministry of Maritime Affairs & Insular Policy, Municipality of Piraeus, Hellenic Chamber of Shipping, Union of Greek Shipowners, Greek Shipping Cooperation Committee, Hellenic Shortsea Shipowners Association and Association of Passenger Shipping Companies.

Source: Posidonia Exhibitions, Hellenic Shipping News

Posidonia 2016 on course to be the biggest ever

Posidonia_logo2_smallPosidonia 2016 is on course to be the biggest ever despite unfavourable market conditions such as plummeting oil prices and slowing economic growth in key economies and especially China.

With floor space demand at unprecedented levels, the organisers of the world’s most prestigious shipping trade event expect to break the previous records set during Posidonia 2014 which was attended by more than 1.840 exhibitors and 19.000 visitors.

“Despite a negative global shipping sector outlook for 2016, Posidonia constantly enhances its appeal as the must-attend international shipping event due to its unique legacy and long heritage as the event which creates new business opportunities in tough markets. ” said Theodore Vokos, Executive Director, Posidonia Exhibitions S.A. the event’s organisers. “The Greek Shipping community is famous for its business acumen and excellent sense of timing when it comes to investing in difficult times, and we are currently seeing many shipowners investing in both newbuildings and the S&P market.”


Increased demand is driven by the major shipbuilding nations and other traditional Posidonia participants from all over the world who have already confirmed their presence at this June’s event in addition to many first-time exhibitors representing some new-to-Posidonia sectors.

Leading the way in terms of floor space demand is China which will once again feature the strongest participation at the maritime industry’s trademark biennial event with its shipyards, equipment manufacturers, shipping services and financial centre providers. The strong Chinese participation at Posidonia together with the recently announced acquisition of the Piraeus Port by COSCO underline the strong friendship and maritime business relation between the two nations.

Far Eastern presence is traditionally a major highlight at Posidonia and this year could be no different with South Korea and Japan again fielding impressive national stands featuring their powerful shipbuilding and equipment manufacturing industries as competition with China intensifies against a backdrop of sinking demand for new orders.

An important new feature of this year’s Posidonia will be the strong participation of old and new maritime centers, as global competition in this sector has also intensified. Traditional maritime centers Singapore, Hong Kong, Cyprus and Malta will again participate with national pavilions with a highly diverse display of shipping products and services. But Posidonia will also welcome niche newcomer Luxembourg who is making its Posidonia debut with a national pavilion featuring Cluster Maritime Luxembourgeois. Other maritime services centers at this year’s event include Dubai Maritime City from the UAE, Canada’s Vancouver International Maritime Centre and Shanghai Maritime and Finance Excellence Centre.

Banking is back with a big bang this year with the National Bank of Greece, Saxo Bank and Deltec Bank amongst the financial institutions returning to Posidonia following the sector’s lengthy absence.

The travel industry is also very well represented with more than 12 travel agents and Lufthansa, Turkish Airlines, China Southern Airways, Aegean Airlines together with a strong contingent of Gulf carriers all presenting their services at the show in their effort to capture a bigger slice of the industry’s growing travel budgets. The growing importance of seamen’s tickets revenues for airlines is also reflected in Lufthansa’s decision to become the Official Airline for Posidonia 2016.

And while the floor plan of the Athens Metropolitan Expo is filling up with exhibitors, Posidonia organisers are also finalizing the most comprehensive conference and seminar programme in the exhibition’s history with over 30 confirmed presentations covering most aspects of the industry’s diverse spectrum. To meet demand for seminar rooms, the organisers had to set-up an additional seminar room, with the sponsorship of UKHO.

The conference programme is spearheaded by the pivotal Tradewinds Shipowners Forum which will tackle a wide range of topics including the major issues of oil prices and the Middle East, the ‘China effect’ and ship supply.

The Japanese Ship Exporters Association will again present cutting edge technological solutions, in a seminar where all major Japanese shipyards will try to woo Greek shipping companies for new orders, as they benefit from the currently weak YEN which makes Japanese shipyards affordable.

The hottest issue in the maritime industry is currently Ballast Water Treatment. With the Ballast Water Management Convention expected to come into force in 2016 and system manufacturers applying for US Coast Guard type approval, more than 15 BWTS manufacturers have already confirmed their participation at the exhibition. Posidonia will also host the Ballast Water Management Summit, organised by Newsfront/Naftiliaki under the auspices of Greece’s Marine Technical Managers Association (MARTECMA), followed by an Argo Navis workshop on the retrofit engineering studies and installation planning of BWTS.

Doing business and keeping up with the industry’s trends are two of the reasons Posidonia is engraved in the diary of thousands of exhibitors and visitors from almost 100 countries who visit Posidonia every two years. Networking is the third component of Posidonia, as a busy calendar of sporting events known as the Posidonia Games, provides many networking opportunities. The Posidonia Games start in the first week of June featuring sailing, football, golf and running, which is making its debut for the first time this year expecting to bring together on the streets of Piraeus some 1,000 runners from all over the world.

In total, over 2,500 shipping professionals are expected to participate in the Posidonia Games, a concept which has helped prolong hotel night stays for many Posidonia exhibitors and visitors boosting revenues for Athens’ hospitality sector and further fueling overall spending across the city’s transportation, catering and entertainment sectors.

Posidonia 2016 will be held from June 6 – 10 at the Athens Metropolitan Expo. The event is organised under the auspices of the Greek shipping community and the five major associations representing Greek shipping interests: Ministry of Maritime Affairs & Insular Policy, Municipality of Piraeus, Hellenic Chamber of Shipping, Union of Greek Shipowners, Greek Shipping Cooperation Committee, Hellenic Shortsea Shipowners Association and Association of Passenger Shipping Companies.

Source: Posidonia Events, Hellenic Shipping News

Hellas: Ship owners invest $7.13 billion in second hand vessels and place orders for 160 newbuildings in 2015

Ship owners from Hellas have ended 2015 as the “leaders”, when it comes to investing in new vessels. In total, according to figures compiled from Allied Shipbroking, shipowners from Hellas were leaders when it came to their activity in the S&P market. In particular, they invested a total of $7.13 billion for the acquisition of all types of ships. In second place came ship owners based in the UK, with a total investment of $2.14 billion, while the Chinese ship owners came in third, as they invested $1.59 billion. Globally, ship owners during 2015 bought 1,351 ships in the S&P market, with a total deadweight capacity of over 90 million dwt, versus 1,523 ships of 93.82 million dwt a year ago. The total value of the traded vessels stood at $28.3 billion versus $25.8 billion a year ago, although not all deal details have been made public.

Greek owners bought twice as much bulkers as tankers, but at a lower cost. According to Allied’s data, owners acquired 156 dry bulk carriers for a total investment of $2.17 billion, 82 tankers for a total of $3 billion and 27 container ships worth $524 million. They also bought 11 Gas carriers for a total price of $1.29 billion. In total the number of vessels acquired stood at 287 out of the 1,351 which were traded worldwide. Their share of the global SnP market for 2015 stood at 14.18% which is the highest and represents an increase versus the 12.8% market share of 2014.

It’s worth noting that Greek owners were responsible for the 38.18% of dry bulk carriers acquired (in dwt terms), against a similar share of 34.13% last year. In the tanker segment, they also bought 25.11% of the dwt capacity which was sold globally, versus 22.4% the year before.

Of course, shipowners from Greece were also sellers in the S&P market. In total, they sold 174 ships for a total price of $3.5 billion, which means their net investments in the secondhand market stood at approximately $3.5 billion, which led to a net addition of 113 ships to the Hellenic-owned fleet. Owners sold 104 dry bulk carriers for little over $1 billion, as well as 50 tankers for a total consideration of $2 billion.

In the newbuilding markets, shipbrokers estimate that Greek ship owners placed orders for a total of 135 new vessels, with an aggregate capacity of 15.52 million dwt. This equates to a market share of 29.6% of the global newbuilding market, versus 26.2% a year before. During 2014, they had placed orders for 160 newbuildings with a capacity of 16.5 million dwt. The majority of these orders were for tankers, as the dry bulk orders stood at just 19, versus 56 in 2014.

On a global basis, ship owners ordered 2,184 ships of 107.13 million dwt. It was a notable decrease versus the previous year (2014), when they had ordered a total of 3,483 ships, with a total capacity of 128.1 million dwt. Again, orders for dry bulk carriers stood at just 306, versus 795 a year back.

Source: Hellenic Shipping News

Author: Nikos Roussanoglou

Shipping conference highlights scope for growth

The inaugural Maritime Standard Ship Finance and Trade Conference, which took place in Abu Dhabi recently, highlighted the opportunity that exists for sustained growth and expansion within the region’s shipping and ports sectors, provided investment is sustained and cooperation between various stakeholders strengthened.

A stellar line up of speakers and panelists from the worlds of shipping, ports, finance and law set out the gains that could be made and the challenges that have to be overcome. After a welcome by Salem Al Zaabi, director-general of the Federal Transport Authority – Land and Marine, Dr Ali Obaid Al Yabhouni, chief executive of Adnatco-NGSCO, highlighted the importance of investing in local human resources, as well as ships.

“We need to continue investing if we are to grow,” he said.

Jamal Majid bin Thaniah, director and vice-chairman of DP World, added that cooperation was key to taking growth forward. “The dividing line between risk and reward is very small,” he said, “It is up to us to seize the opportunities that are there.”

He was followed by former Greek finance minister Petros Doukas, who led a high-level Greek ship-owner delegation to the event. Doukas underlined the lack of liquidity in the market, and the fact that it was still not easy for shipping companies to borrow money. He also noted the challenge that Arab banks faced in competing on a global scale.

Khamis Juma Buamim, chairman of the board of DDW-PaxOcean Asia, told the audience there was a need to create opportunities with real growth-orientated policies.

“It is the time for leadership and vision. We need to invest and innovate to capitalise on the huge potential that exists,” he concluded.

The keynote session ended with a speech by Capt Mohamed Juma Al Shamisi, chief executive of Abu Dhabi Ports and host of the event. He argued that “ports in the region need to adopt advanced technology to generate expansion and growth.”

Source: Khaleej Times, Hellenis Shipping News

The Republic of the Marshall Islands Ranked Number One Foreign Flag in Greece

The Republic of the Marshall Islands (RMI) flag moved into the top position for the Greek merchant fleet in terms of number of vessels and is now the largest international flag overall in Greece in terms of deadweight tonnage (DWT). International Registries, Inc. and its affiliates (IRI), who provide administrative and technical support to the RMI Maritime and Corporate Registries, have been cultivating deep ties to the Greek shipping community since IRI’s formation. With the largest IRI office outside of its headquarters in Reston, Virginia, the Piraeus office employs highly experienced and qualified maritime experts, capable of dealing with day-to-day maritime operations.

“Greek shipowners have been the largest shipowning group in the Registry in terms of gross tonnage since the third quarter of 2009,” said Theo Xenakoudis, Director, Worldwide Business Operations for IRI. “Three years later in 2012, the bulk carriers outnumbered the tankers in the RMI fleet largely due to the growth of the dry cargo vessels coming out of Greece and today remain the number one vessel type in the RMI Registry with an average age of 6.3 years old,” he continued.

Greek owners and operators are an integral force behind the rapid growth the RMI Registry has seen in recent years. Greek owners account for over 25% of all vessels which registered from 01 January – 30 September in 2015 representing 92 vessels and over 4 million gross tons (GT) entering the RMI Registry during that time. Overall, Greek owners represent 38% of the bulk carriers registered in 2015.

According to the Shipping & Finance November 2015 issue, the RMI Registry holds the top position among flag States with the Greek merchant fleet in terms of number, with an almost 14% increase from March 2015 to November 2015 of Greek owned vessels registered in the RMI. The same report shows that the RMI fleet stands at 913 vessels in the Greek market and over 70 million DWT.

Due to the strength of the Greek merchant fleet and the substantial number of Greek owners who have chosen to register their vessels in the RMI, the RMI Registry strives to maintain open communication and remain apprised of issues and concerns affecting the Greek shipping community. Through personnel, service expansion and innovative platforms like the Marshall Islands Quality Council (MIQC), which is an independent, consultative body comprised of industry stakeholders, the RMI Registry is able to connect and discuss topical issues relevant to owners and operators. MIQC participants are provided with the opportunity to engage in and maintain an active voice in the RMI Registry’s development and implementation of regulations concerning the safety, security and environmental performance of their vessels flying the RMI flag.

While the MIQC continues to examine the challenging issues facing the shipping community, it was realized that advisory groups geared towards different markets be established to more narrowly discuss sector specific issues and concerns. During the April 2013 meeting of the MIQC, it was determined that a group needed to be developed to solely concentrate on issues related to and affecting blue water vessels and thus, the Blue Water Advisory Group (BWVAG) was formed. Takis Koutris was announced as the Chairperson of the BWVAG and has been working diligently to ensure issues to be or being discussed at the International Maritime Organization will have the attention of and comment from this group.

“The RMI Registry has proven, through its unique efforts like the MIQC and the BWVAG, to be responsive to all markets and engaged in active dialogue with industry stakeholders to ensure the voice of the shipping community is heard during the rule making process so that regulations are applied properly to all vessels,” said Mr. Koutris.

Communication and customer service have long been hallmarks of the RMI Registry, and are a couple of the many reasons for the increase in Greek owners flagging their vessels in the RMI. The quality of service provided by a flag State is a vital component to the success of the Greek fleet. “The RMI Registry leads not only in numbers, but in the excellence of its service to its customers,” said Harry Vafias who is now in the process of moving five more liquid petroleum gas (LPG) vessels into the RMI fleet.

Source: Marshall Islands Registry, Hellenic Shipping News

Rethinking Ship Design

Seri_Bakti_lng_carrier 290x242The need to operate ships both sustainably and more efficiently is a consuming passion for the maritime world today, constantly throwing up innovative ideas. Can anyone think of a better and cleaner way of propelling giant container ships than the huge two-stroke diesels that are relied upon today? A combined gas and steam turbine, such as those found aboard warships, for instance, but with electric drive to the propeller, seems an interesting concept.

We tried gas turbine merchant ships some thirty years ago – think of the Australian ro-ros, some very fast trans-Atlantic container ships and the amazing Baltic express ferry Finnjet. They were all technically successful. Sadly, it was the steeply escalating fuel prices that killed off these vessels prematurely, leaving gas turbines largely to navies. But what if the power and flexibility that gas and steam turbines offer in a compact space can be combined with LNG – the “fuel of the future”? How might this affect the design of very large containerships?

An interesting collaboration between cryogenic engineers GTT, containership giant CMA CGM and classification society DNV GL has resulted in a technical and feasibility study for a new very large containership designed around this LNG fuelled, turbine powered concept.

The design illustrates a number of advantages that emerge from such a propulsion arrangement. Compact and light, while producing an enormous power, the combined gas and steam turbine can be positioned virtually anywhere on the ship and does away with the need for a large engine room stuffed with machinery. The electrical propulsion motors can be positioned near to the propeller shaft they drive. And while the fuel to power efficiency ratios of conventional diesel engines can be up to 52%, a modern land-based combined cycle LNG fuelled power plant will reach efficiencies of 60%.

The downside of LNG as marine fuel has always been sees as the space needed for the storage of the insulated tanks, but the designers have been able to situate two 10,960Cu.m. LNG fuel tanks, with the combined gas and steam turbine installation above them, under the bridge superstructure. These two tanks would provide sufficient range for the ship to make an Asia/Europe round trip between bunkering.

With no engine room to eat into the below-decks cargo space, there would be more room for cargo. And with the electric power generation separate from the electric propulsion, the designers have been given even greater flexibility, the design suggesting three electric main motors can be arranged on one common shaft. Clean fuel, simplified machinery systems with increased redundancy and a high level of safety might also be expected, say the designers to the sort of maintenance strategies that are common practice in the aviation industry. The design is still only a concept, but shows that there is plenty of scope for innovation in the maritime world. Meanwhile, the biggest ever two stroke diesel to be constructed is being installed in another giant container ship in Korea. There is lot for designers to think about !

Source: BIMCO, Hellenic Shipping News

Shipping’s World Cup: Can Europe Get Back In The Game?

New Zealand’s Rugby World Cup victory has further cemented the now long-held dominance of the All Blacks in international rugby. But the performance of the European nations in this year’s World Cup was disappointing, and over the long-term in shipping too, focus has gradually shifted from Europe to the other side of the world, with Asia the increasingly dominant player in many parts of the maritime industry.

Another Round Kicks Off

The rise of Asia and especially China as key drivers of seaborne trade growth has over recent decades turned maritime eyes increasingly eastwards. Across many aspects of the shipping industry, 2015-11-06_upload_8822370_SIW 1196Asia has consistently been moving up the league tables, but having slipped behind in the game, how does Europe’s position look now?

A look at overall economic performance suggests not. EU GDP growth is certainly improving after falling to -0.4% in 2012 (see graph), partly owing to low oil prices and the weak euro. But this recovery is far from convincing – growth is expected to remain below 2% this year. As a team performance, the overall impression of regional growth is one of distinct patchiness, with a weak showing in Greece and in countries exposed to difficulties in Russia partly offsetting improved displays in others such as France, Italy and Spain.

Trade Struggles To Convert

The implication of these trends on seaborne trade is similarly mixed. After notably firmer volumes in 2014, European container imports have slowed in the year to date, with volumes on the Far East-Europe route down 5%. Imports even into countries showing improved economic growth this year have declined. Asia remains the focus of box trade expansion, with Europe’s share of global imports set to fall below 14% this year.

In the dry bulk sector, China’s leap up the leaderboard has squeezed the share of EU imports in global iron ore and coal trade to 12% last year. China’s dry bulk imports are now coming under pressure, but the EU has been unable to claw back lost ground. However, in the crude oil trade, Europe has stubbornly stayed in the game, keeping a share of around 24% in global crude trade since 2010. With EU imports set to grow 8% this year, 2015 could see the EU drive a greater share of crude trade growth than China for only the second time since 2005.

Tackling The Leader

Moreover, an apparent bounce-back is currently being seen in fleet ownership. Asia’s rapidly growing fleet had reduced the share of EU owners in the world fleet to 35.5% in 2013 (see inset graph). However, a 15% expansion in the Greek-owned fleet since start 2014 has helped the EU to begin to even out the scoreline, and the EU’s share of the world fleet is now rising for the first time since 2008.

But No Turnover

So, some elements of European shipping now seem to be driving forward. But economic difficulties linger on, and in reality improvements have generally been only limited in scope. For now, just as the All Blacks must be feeling secure at the top, in the world of shipping Team Asia still seems well ahead of the European pack.

Source: Clarksons, Hellenic Shipping News

Hellas: Fleet growth continued unabated as ships rise to more than 4,900 with a dwt of 328.2 million tons says Petrofin Research

With a growth of 4.3% in vessel numbers to 4,909 vessels and of 7.52% in DWT terms to 328,254,495 DWT, the Hellenic shipping industry continued its growth during the last year.
This growth is even more remarkable if we take into account the challenging prevailing market conditions in most sectors and dry bulk in particular, as well as the poor associated cashflows and the selective financing policy by banks. This is the main conclusion from this year’s research of the Greek fleet evolution, compiled by Petrofin Research.

Among the highlight included are the following figures:

The overall number of Greek vessels has gone up by 202 to 4909 from 4707.
Tonnage is also up by 24,675,319. Overall tonnage: 328,254,495 tons DWT, an increase of 7.52%
Age is also down again, to 12.73 from 13.26 in 2014 and 14.05 in 2013 and 14.7 in 2012.
Using a 20,000 DWT cut-off, the average age of the Greek fleet has fallen to 8.71 from 9.14 years in 2014 and 9.83 in 2013.
The large Bulker fleet (over 20,000 tons DWT) has gained an impressive 163 vessels, its age is down to 8.6 years, its tonnage is up by 19.5m tons DWT and it has lost 6 companies.
The large Tanker fleet (vessels over 20,000 tons DWT) shows a small increase in tonnage 220,751 tons DWT and a very small increase in unit numbers by 1. Its companies are down by one but age wise there was a drop, which shows a fleet renewal effort.
The large Container fleet (vessels over 20,000 tons DWT) is a bit younger still, despite the fact that this is a sector that shows a slow rate of renewal. It has gained an impressive 2.9m tons DWT and it still is one of the very few sectors which show an increase in the companies that run them, up by 4.
Regarding the LPG sector, large LPGs (over 20,000 tons DWT), the number has gone up by 3 units, the fleet DWT is slightly up by 128,813 tons DWT and their age is also up to 13.7.
The LNG fleet has expanded significantly with the addition of 24 vessels to last year’s 50 strong fleet.
The Greek fleet continues to expand in an ever more consolidated manner, as Greek companies are reducing

According to the company’s analysis, this trend can be explained by the fact that “1) a number of Greek owners are committed to building up their eco fleets, as the vessels of the future and in the expectation that they will reap rewards in time, when conventional tonnage shall either be scrapped or shunned by charterers,

2) public companies in particular, need to grow, as part of their ‘public’ profile strategy and in order to ‘sell’ their story to the market and shareholders, and

3) other Greek owners are consummating Joint Ventures with private equity funds and are following previous newbuilding ordering decisions. Admittedly, there have been many delivery extensions and some order conversions into tankers but, on the whole, Greek owners remain committed to following through with their orders and outliving the difficult markets”.


Petrofin Research noted that “unsurprisingly, the average age of the whole Greek fleet (in DWT terms over 20,000 tons) has continued to fall to 8.7 years (counting vessels in the water and those being delivered within one year), although the rate of decline in the average fleet age is slowing down. Specifically, the number of dry bulk companies of fleets of over 20,000 DWT has remained static over the last 12 years, at about 313, whereas the number of vessels has risen from 1,318 to 1,929 and the total DWT has risen from 76m to 155.3m over the 12 year period. This demonstrates the emphasis on larger fleets per company and of larger DWT capacities”.


The researcher added that “a similar picture is shown in the container fleet of over 10,000tons DWT, with the same number of players, but with rising vessel numbers from 158 to 297 over the 12-year period and a remarkable increase from 5.3m to 18m in DWT terms over the period, whilst the average fleet’s age has fallen from 17.4 to 9.7 years. The trend has continued unabated last year, underlying the quality and quantity improvement”.


In the tanker market, tankers of over 20,000tons DWT are displaying similar but somewhat different trends. Whereas the overall number of companies has remained pretty static at approximately 90 companies, the number of vessels has grown from 657 to 808 over the 12 year period, which is a less impressive growth. The picture is similar in DWT terms from 71m to 117m, which implies growth but not as pronounced as the other two sectors. The improvement in age is equally pronounced from 18.7 to 9.5 years for the 20,000 DWT fleets. Here, though, the improvements may also reflect the requirements for lower ages by the oil majors and tanker charterers too, where ‘vetting’ has become systematised and a condition precedent for employment for tankers.


Unsurprisingly, “the Greek LNG sector is advancing and so is the global LNG fleet. The global outlook is unclear with most of the newbuilding orders hitting 2017 and the sector showing a 38.6% newbuilding orderbook (Clarkson’s Shipping Intelligence Weekly). It is anticipated, however, that long term contracts cover a large number of the newbuilding orders. The Greek LPG sector has shown a somewhat mixed trend. Whereas the number of participants has grown (with more incomers after the cut-off date of our research), the number of vessels has remained pretty static, whilst the capacity has grown, but less impressively compared to the 3 main sectors. Interestingly, the average age of the LPG vessels has risen reflecting the effect of second hand purchases and fewer newbuildings for this sector”.


Commenting on these developments, Petrofin Research noted that “overall, Greek owners have continued to commit huge sums, not only to preserve their fleets, but to grow them and modernise them. Behind their brave faces there is worry as to the slowdown of global growth, in particular that of China, and how quickly shipping would return to vessel incomes that would provide a positive return to their committed capital. The Global tanker sector, aided by the fall in the price of oil and some structural and geographical shifts, appears more promising, but once again tanker orders have increased to 17.2% of the current fleet and year on year deliveries are expected at approximately 3% for 2015, as opposed to 1.5% last year (Clarkson’s Shipping Intelligence Weekly). Vessel prices are not fully reflecting the rises in vessel incomes with product tankers’ incomes having given up the rises achieved earlier this year, whilst crude markets continue to show significant gains that appear more sustainable. This implies that the market needs reassurance over the longer term prospects for tankers, in general, although some sub segments offer better prospects. In the light of the Greek political and economic crisis that continues and the huge uncertainty surrounding the future of Greek shipping operated out of Greece, due to the expected increase in taxation, the growth in vessels’ capacity and improvement in age comes as a surprise. Greek owners are renowned for their ability to pick up the right time to invest and disinvest. Time will show if they got it right once again in these unprecedentedly challenging times”, the researcher concluded.


Source: Hellenic Shipping News

Author: Nikos Roussanoglou