Despite the positive sentiment surrounding oil tanker freight rates, caution should be exercised before building new ships, Italian shipbroker Banchero Costa cautioned.
The tanker market has continued its strong performance in the first half of 2015, riding on positive sentiment.
Very large crude carriers (VLCCs) on the benchmark Gulf-Asia Pacific route averaged USD63,423/day in the first six months of 2015, a considerable increase from the average of USD17,147/day over the same period in 2014.
Market fundamentals have improved as newbuilding deliveries have declined.
In the first half of 2015, nine VLCCs totalling 2.6 million dwt were delivered.
Meanwhile, a total of 29 VLCCs totalling 9 million dwt have been ordered in the same period.
Banchero Costa said, “On top of this we have good news on the demand side, with the oil market well supplied. OPEC is refusing to cut output and oil prices have remained fairly low encouraging consumption.”
Banchero Costa commented that while 2015 should be a good year, 57 VLCCs of at least 17 million dwt would be delivered in 2016, the second most deliveries after 2011 when 65 VLCCs were built.
“The orderbook could get worse, considering the rush to yards we are seeing. Therefore, the next few months should be positive, but 2016 could be more challenging,” said Banchero Costa.