SSG No 20 - Shipgaz

Ventspils, while products are shipped
through Vysotsk, St Petersburg, Tallinn,
Riga, Ventspils, Klaipeda and Kaliningrad.
The eight European Union countries and
Russia, all bordering in the Baltic Sea, are
concerned by the potential environmental
impact by spills and by the sheer volume
of traffic. That is why they are working
together within HELCOM co-operation
for protecting the Baltic Sea.
aframax volatility
The bulk of Northern European crude
exports are carried in aframax size vessels.
Exports to the US and Canada are also
shipped in VLCCs and suezmax tankers.
However, the most important type of crude
tanker in North Europe is the aframax,
which, as we noted earlier, has experienced
an extremely volatile market, particularly
in the past twelve months.
At present there is too much aframax
tonnage around at approximately 74.0
million DWT, hence the freight volatility,
which has caused owners some grief of
late. With the volatile market at least in the
past 18 months, it is important to see the
North European market as part of a whole
Atlantic market, including the Caribbean,
the Mediterranean and the Black Sea. The
inter-play between the markets is interesting,
and we can see a certain “slush-effect”,
as tonnage interchanges between the areas.
time to weed out tonnage
The transport bank DVB says in its latest
market outlook for aframaxes that there are
plenty of single hull vessels, which are up
to their fifth special survey. Owners might
choose to scrap at more than USD 500
per light weight ton, or even find alternative
employment as conversion to FPSOs.
The bank also believes that high oil prices
might provide more employment as more
marginal fields come into production. DVB
highlights healthy, long-term prospects for
aframaxes by forecasting a demand growth
of between six and seven per cent because
of increasing trade to North America and
Europe. All in all, the bank expects demand
to be 26 per cent higher by 2010 compared
with 2006.
net fleet growth
DVB estimates that the aframax fleet will
have a net growth of nine per cent next
year and eleven per cent in 2009, and
admits that this is likely to weigh down the
market, before the conditions improves
North European clean tanker rates 2006–2007
Worldscale � Clean MR, 37,000 tons, UKCont–TA
� Clean, Baltic–UKCont, 30,000 tons
� Clean, Baltic–TA, 65,000 tons
400
350
300
250
200
150
100
Qt 1 ‘06
2 ‘06
when single-hull vessels are phased out
from 2010. The orderbook of more than
ten million DWT in 2009 will be particularly
difficult to accommodate, and in
2010 there are nearly seven million DWT
on order. The bank also talks of the 150 or
so coated aframaxes currently in the market
and another 90 on order.
the magical ws 100
3 ‘06
4 ‘06
As we noted earlier owners work in an
extremely volatile market. The worrying bit
is when the market remains below WS 100
1 ‘07
2 ‘07
North European dirty tanker rates 2006–2007
Worldscale
350
300
250
200
150
100
50
Qt 1 ‘06
2 ‘06
3 ‘06
4 ‘06
1 ‘07
3 ‘07
4 ‘07
Source: Scandinavian Shipping Gazette
� Suexmax,135,000 tons, North Sea–TA
� Aframax, 100,000 tons, Primorsk–UKCont
� Aframax, 80,000 tons, NS–UKCont
� Aframax, 100,000 tonnes, Murmansk–UKCont
2 ‘07
3 ‘07
4 ‘07
Source: Scandinavian Shipping Gazette
in North Europe for any length of time.
Except for the last two weeks of September
the market has been lodged below the
magical line since the beginning of August.
There was another less profitable period
in March this year and at the beginning
of December last year. However, since the
turn of the year, the cross North Sea market
only reached WS 200 in one week in
late January and once in late March. Since
then the market has shown a falling trend
(see graph).
petter arentz
SCAnDinAViAn SHiPPinG GAZETTE • OCTOBER 26, 2007 23