1. 1/21/2014
S&P, Newbuilding and Demolition Update (January 19th, 2014) – Tanker Market Focus | Karatzas Shipbrokers Register
Karatzas Shipbrokers Register
The Shipping Sale and Purchase (S&P) Worldwide Report
S&P, Newbuilding and Demolition
Update (January 19th, 2014) – Tanker
Market Focus
Posted on January 19, 2014
Since our report of last week with its headline news of Euronav acquiring the Maersk Tankers
VLCC fleet of fifteen vessels at $980 million, freight rates for tankers, primarily crude oil tankers,
have seen levels that were almost forgotten, or even non existent any more. VLCC rates have
ranged between $40,000 and $50,000 pd for this past week, while Suezmax and aframax
tankers saw even higher rates, exceeding $100,000 pd for certain routes, primarily cross-Med
and Baltic Sea, based on heavy delays in Bosporus and Libya having a change of heart in terms
of oil exports. Clean tankers in the products trade have been ‘floating’ along with LR2s heading
to Japan getting less than $10,000 pd, while dirty tankers whether cross-Med or USG-Caribs are
getting better reception.
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2. 1/21/2014
S&P, Newbuilding and Demolition Update (January 19th, 2014) – Tanker Market Focus | Karatzas Shipbrokers Register
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—
Enlightened sale of MT ALGECIRAS SPIRIT (Image source:
shipspotting.com)
While Euronav was in the news last week with their transformative acquisition, this week they
have been in the news with exceptional pricing for the sale of the 1999-built VLCC MT
„LUXEMOURG” (299,000 DWT, 1999, Daewoo) for FPSO conversion to Modec at $28 million.
Probably the price is close to $10 million above salvage value and several million from a
hypothetical sale for ‘further trading’, but still meaningfully lower than the $35.8 million that
Euronav achieved in 2012 for the sale of sistership vessel MT „ALGRAVE” still to Modec for
again conversion purposes. Earlier in January, MT „SATURN GLORY” (299,000 DWT, 1998,
Daewoo) was sold in excess of $23 million to clients of Sentek Marine & Trade. In the Suezmax
market, Avin Oil of Greece has acquired the good vessel MT „ALGECIRAS SPIRIT” (150,000
DWT, 2000, Daewoo) from publicly listed TK Tankers at about $17.8 million. The pricing is a firm
improvement over the sale of sistership tanker MT „TENERIFE SPIRIT” (15,000 DWT, 2000,
Daewoo) again from Teekay Tankers to Eurotankers in Greece in early November 2013 at about
$16.3 million. Still in the Suezmax market, MT „HERO” (156,500 DWT, 2011, Jiangsu
Rongsheng) was sold at auction to Greek buyers (Alma) at $51.5 million.
Teekay has been active also in the buying front as they have acquired in a different transaction
four modern sistership aframax tankers owned By Montanari but controlled indirectly from a
European bank which had to approve any sale (MT „VALLESINA”, MV „VALBRENTA”, MT
„VALFOGLIA”, and MT „VALDARNO” (2009/2009/2009/2010, 109,000 DWT, Hundong
Zhonghua)) at about $30 million each. We understand that previous potential buyers were not
impressed with the quality of vessels, but the pricing had to be ‘right’ given sellers’ price ideas
came down sizably since early 2013 at a time when asset prices, rates and momentum were
heading the opposite direction. In a sign that there is a big disconnect with tanker tonnage sold
before the turn of the century, MT „NORD” (105,000 DWT, 1998, Halla Eng.) achieved $9.8
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3. 1/21/2014
S&P, Newbuilding and Demolition Update (January 19th, 2014) – Tanker Market Focus | Karatzas Shipbrokers Register
million, a price no much higher than scrap, but still strong for what vessels of this vintage have
been fetching of recent.
The LR1 tanker MT „ANNA VICTORIA” (75,000 DWT, 2004, HHI) was sold to clients of Eletson
at region $22 million. In general, the market for product tankers has been cooling off as many
players are trying to stay away – let’s say a ‘hangover’ effect from the massive orders in the
sector, while we have seen ever increasing inquiry in the crude tanker market, including
purchase inquiries for VLCCs, Suezmax and aframax tankers; sometimes we are confused
whether such inquiries are legitimate efforts to enter / expand in these markets or cases ‘the tail
wagging the dog’. No doubt however, that there is increased levels of inquiries in the segment
which could be a sign of potential ‘break out’ of the market.
Stainless steel parcel tanker MT CLIPPER MAKISHIO (Image source: Wiki Commons)
In the stainless steel parcel tanker market, there is the interesting sale of MT „CLIPPER
MAKISHIO” (19,980 DWT, 2009, Fukuoka SB) to clients of Songa Shipping in Norway at just
below $27 million. There are no many sales in this niche market in general, so each one of them
is noteworthy; the pricing has been fairly strong for a vessel already five years old.
The demolition market seems to be coming back to market slowly after the holidays, but again,
when freight rates are solidly in cash flow positive territory, it’s only logical that owners are given
an extension to do the inevitable; maybe another trip, maybe another month, but definitely not
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4. 1/21/2014
S&P, Newbuilding and Demolition Update (January 19th, 2014) – Tanker Market Focus | Karatzas Shipbrokers Register
now. Tankers coming for their third or fourth special survey are the lowest hanging fruit, and the
lower quality vessels with opex. Demolition pricing is solidly in the $400/ldt territory, with tankers
getting $450/ldt or even more in subcontinent, with about 20% discount in China, at about
$350/ldt.
Our report in the dry bulk market has been posted separately due to volume of reported
transactions (please click here to access.) Developments in the financial and capital markets
have always been of heightened interest, especially the prospects for a new round of stress tests
with the European banks. That will be an interesting development to watch, although it seems
ever likely that Basel III will have little chance to get implemented as envisioned originally and on
schedule; just more regulatory bodies seem to be getting more receptive to the banks’ points of
view and also giving higher priority to stimulating economic growth at the cost of curtailing or
penalizing banks just because they stand on the wrong side of a benchmark figure.
© 2013-2014 Basil M Karatzas & Karatzas Marine Advisors & Co. All Rights Reserved.
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and no liability whatsoever will be accepted for taking or failing to take any action upon any
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This entry was posted in S&P Update and tagged Basil M Karatzas, Euronav, Eurotankers,
Karatzas Marine Advisors & Co., Modec, TK by Karatzas Marine Advisors & Co..
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5. 1/21/2014
S&P, Newbuilding and Demolition Update (January 19th, 2014) – Tanker Market Focus | Karatzas Shipbrokers Register
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