Dec.
5 (Bloomberg) -- Mitsui O.S.K. Lines Ltd., owner of the world’s largest
shipping fleet, sold a double-hulled supertanker for demolition that would be
the newest such ship ever scrapped after vessel earnings plunged this year.
The
Atlantic Liberty, built in 1995, is the youngest very large crude carrier to
face demolition, data from Clarkson Research Services, a unit of the world’s
biggest shipbroker, show. The tanker will be the world’s second VLCC with a
double hull to be scrapped, Nafees Zaman, a spokesman for Maryland, U.S.-based
Global Marketing Systems Inc. said. GMS is the biggest cash buyer of vessels
for demolition.
An
oversupply of the tankers and falling demand growth is driving earnings for
VLCCs to the lowest in more than 14 years, pushing prices for tankers older
than 15 years 38% lower over the year.
“It’s
positive for the market balance to see medium-old tonnage disappear like this,”
Petter Narvestad, an analyst at Fondsfinans ASA, an Oslo-based investment bank,
said by phone today. “Tankers normally have a lifetime of about 25 years.”
The
price paid for the Atlantic Liberty equated to $20.1 million, HSBC Shipping
Services Ltd. said in an e-mailed report Dec. 2. A 15-year-old VLCC is worth
$20.2 million, according to Seasure Shipping Ltd, a London-based shipbroker
that assesses vessel values. That’s down from $32.4 million on Dec. 31.
The
scrapping of the Atlantic Liberty meant the owners took a “pragmatic, and
arguably courageous decision to take a hit on the price, as opposed to the risk
of facing her as competition for cargo in the future, under different
ownership,” Clarkson said in a weekly report published Dec. 3. Tokyo-based
Mitsui didn’t respond to three phone calls and 2 e-mails seeking comment.
Too Many Vessels:
The
sale highlights the struggle facing vessels more than 15 years old to trade
profitably, London-based shipbroker Galbraith’s said in a weekly report on Dec.
2. Galbraith’s, Clarkson and HSBC Shipping all reported the sale, saying the
vessel will be broken up in India.
Tanker
owners ordered too many new vessels during a 4-year boom that lasted to
2008, creating an oversupply that’s depressed returns and ship prices as global
demand growth for crude weakens.
Returns
for VLCCs will average $15,000 a day for the next 2 years, less than half of
the $34,500 they need to break even, Pareto Securities ASA said in a report in
October. Average earnings for the vessels, which peaked in 2004 at $97,000 and
were at $93,000 four years later, fell to $19,000 by 2011, according to the
Oslo-based investment bank.
The
first double-hull VLCC scrapped, the 1991-built D Elephant, was sold in May,
Zaman said by e-mail.
--With
assistance from Alaric Nightingale in London and Chris Cooper in Tokyo.
Editors: John Deane, Claudia Carpenter
To
contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net
To
contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net
Source: Bloomberg Businessweek. By Michelle Wiese Bockmann. 6 December 2011
No comments:
Post a Comment