Rampant deliveries of very large crude carriers (VLCC) to top owners in the large tanker sector is expected to curb further consolidation of tanker owners over the next couple of years.
The combined company between Euronav and Gener8, if approved, will have a fleet of 75 crude tankers, including 44 VLCCs and 28 Suezmax crude tankers, representing over 18 million dwt in total.
As explained by Gibson Shipbrokers, the beauty of the agreed deals is that both parties would grow their fleets without adding to the existing orderbook and as a result of clever acquisitions, bring down the age profile of their respective fleets.
However, the companies that have already made substantial orders for new tonnage are not likely to take the consolidation train, according to Gibson.
This, in particular, relates to Asian giants such as China VLCC, Bahri and Cosco Shipping (CSET), with NITC’s share slipping.
“Apart from Euronav and NITC, all of the top ten owners have tonnage on order, which will swell the ranks by another 44 units. Maran, steadfastly remaining independent, will take delivery of 9 more VLCCs before the end of 2019. However, both China VLCC and CSET have substantial orderbooks, which will eventually give them an even more dominant position,” Gibson said.
“The domination of the big fleets and the diverse ownership of the remainder of the VLCC fleet, most 10 units or less, is likely to limit any further consolidation in the short term.”
Based on the data from VesselsValue, CSET has 14 newbuildings set for delivery from 2019 to 2021, including six VLCCs. CSET’s tanker fleet is composed of 114 ships.
On the other hand, China VLCC has 10 very large crude carriers on order, eight of them set to be delivered this year, VesselsValue data shows. Two more are set to follow suit in 2019. The company’s current fleet is composed of 44 tankers.
Bahri has five VLCCs scheduled for delivery this year.
What is more, taking into the account the prognosis of a tough year ahead for the crude sector, owners in the large tanker sector are unlikely to have further consolidation as a priority.
As disclosed last week in a conference call, DHT doesn’t expect 2018 to bring much relief for tanker owners as both supply and demand continue to exert pressure on earnings.
“We are currently being hit from both sides,” Trygve Munthe, Co-CEO of DHT Holdings, said.
“Demand for tanker transportation is hit by inventory drawdowns and on the supply side we are hit by deliveries of newbuildings exceeding retirements of older ships.”
Munthe explained that the main headache in the near-term continues to be the oil inventory cycle, mainly driven by OPEC cuts.
World Maritime News Staff; Image Courtesy: Euronav