World News
Ageing Tanker Earnings Match Eco-Ships in 2014
Earnings achieved by the "ageing" tankers in Torm's fleet kept pace with newbuild and retrofitted eco-ships of rivals in 2014, ShippingWatch reports.
A comparison of reported average time charter equivalent (TCE) earnings for various classes of tanker operated by Torm, Frontline 2012, Scorpio Tankers, Teekay, Ardmore, and Norden showed no clear superiority of new eco-ships over older or retrofitted vessels for 2014.
TCE earnings reflect the charter rates achieved less voyage expenses, predominantly bunkers and port fees.
While Torm lagged rivals Scorpio Tankers and Teekay in the LR2 category, it beat Scorpio Tankers' TCE earnings in the LR1 trade, and beat both Scorpio Tankers and Norden earnings for Handysize vessels.
Torm's MR tanker TCE earnings were the lowest among those compared, at $14,697, but were close to most rivals apart from Frontline 2012 which achieved $16,600.
Ardmore's eco-retrofitted MR tankers achieved $14,793 while its newbuild eco-ships saw TCE earnings of $15,913.
According to the report, the average age of Torm's fleet is around ten years, which is said to be at the higher end of its peers.
More data will be needed over a longer period of time in order to assess the actual difference in earnings potential of eco-ships and older tonnage, but the comparison here suggests that there was no clear benefit last year for Eco vessels.
Frode Mørkedal, Analyst for Platou Markets, said that the drop in oil prices had weighed on the results for eco-ships as, while they have operated on reduced bunker consumption, the cash saving associated with that reduction has halved along with the bunker price.
When bunker prices rise, it was noted that eco-ships could still have difficulties delivering significant financial savings as some tankers spend many days berthed in ports, during which time fuel efficiency becomes irrelevant.
But Mørkedal said eco-ships should still face better prospects.
"Charterers prefer newer tonnage, which will thus be employed first.
"And if the ships were purchased at attractive newbuilding prices they will also feature lower break-even costs."
In December, shipowners were said to be seeking to offload newbuild ultramax eco-bulkers as a result of low oil prices.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 649.00 | 0.50 | 775.00 | 3.50 |
| Rotterdam | 603.50 | 1.50 | 759.50 | 11.50 |
| Houston | 626.50 | 2.50 | 794.00 | 2.00 |
| Fujairah | 649.00 | 0.50 | 904.50 | 6.50 |
| Global 20 Ports Average | 664.00 | 2.00 | 855.00 | 0.00 |
| Global 4 Ports Average | 632.00 | 1.00 | 808.00 | 4.00 |
| Global Average Bunker Price | 716.50 | 1.00 | 901.00 | 12.50 |
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