French orders to foreign shipyards

Dwt
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
• Atlantic
While the first half proved better than expected, rates
and daily returns have fallen steadily since June in the Atlantic.
Business in Northwest Europe and the Mediterranean has long
suffered because of restrictions on refined Russian exports.
Europe/USA trips are now rare. Europe has benefited little
from American refinery closings because Korea or Caribbean
origin ships have covered demand sparked by these events.
At the same time, restructuring in Nigerian refined imports
has resulted in shorter offshore waits, increasing available
tonnage on the market.
• Period charters
Charterers generally renewed time-charter contracts, but
at reduced rates, while ship operators and traders tended
to end charters when they had the opportunity.
The number of twelve-month charters was roughly the same
as that recorded in 1998 (about sixty), but freight averages
fell by 15% for the second consecutive year to $11,750
per day for 43,000 to 47,000 dwt vessels and $15,000
for 70,000 dwt vessels.
Only Vela signed a 5-year charter for two 47,000 dwt vessels.
At the end of the year, NYK signed three charters for
relatively old (10 years) straight tankers, signalling the
reappearance of Japanese charterers on a market that
they seemed to have abandoned for nearly a year now.
Shipowners managed to stem falling rates by generally
refusing to accept offers lower than $11,500 per day for
modern 45,000 dwt vessels.
Charterers’ recently acquired taste for 35,000 dwt vessels
MR Product tankers
Distribution by size and age
(intended to replace 30,000 dwt non-SBT vessels) has helped
shipowners to obtain rates proportionally higher than for
larger vessels.
Prospects
0-5 years
6-15 years
more than 15 years
20-30,000 dwt 30-40,000 dwt 40-50,000 dwt
Short-term market prospects are indifferent, but in the
medium term they should improve if newbuilding orders
slow, especially in the 43,000 to 47,000 dwt and the
over 70,000 dwt classes.
The significant rise in bunker oil prices during the second
half cut sharply into daily returns for ships. This factor is
in all respects temporary, and should have a reduced
effect in 2000.
Medium-sized ships will probably be the most adversely
affected, due to the lack of a real market niche. The
situation in China will weigh heavily on refined product
market prospects in that zone as long as import restrictions
imposed in 1998 remain in place. An increase in
domestic consumption of between 4.5 and 5.5% per
year over the next ten to fifteen years has been forecasted.
By 2010 China will need to import 142 million
tonnes of oil per year, as opposed to the 35 million it
takes in now.
One very favourable factor is the current sustained level
of world growth, which creates refined product movements.
While in the short-term, new refineries coming
on line in the Far East have the effect of shortening
routes, it is foreseeable that exporting trends could
appear, creating new opportunities for shipowners.
• How will China meet its refined product needs?
• How will Persian Gulf countries respond to the near
disappearance of Indian imports?
T h e t a n k e r m a r k e t
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