Product Tanker Orders Could "Kill" Recovery

by Ship & Bunker News Team
Monday July 15, 2013

Shipbroker Banchero Costa & Co. (Bancosta) is warning that new product tanker orders could "kill" the opportunity for recovery in the market segment before it begins, Bloomberg reports.

Owners ordered 4.28 million deadweight tonnes (dwt) of medium-range product tankers over the first five months of 2013, up from 1.4 million dtw during the same period last year.

"When a real recovery has not yet materialised it is clearly unhelpful that owners are now truly rushing to place newbuilding orders," Bancosta said in the report.

The shipbroker predicts fleet growth will rise to 3 percent in 2013 and 4 percent in 2014.

"Prospects remain positive, but more restraint would be advisable, so not to kill the recovery even before it comes," it said

Those positive prospects include the increased concentration of refinery capacity in Asia and the Middle East as new refineries there outcompete older facilities in Europe and the U.S., which the report predicts will lead to more long-distance shipments of oil products.

Scorpio Tankers, which between December and May had a six-month ordering spree that saw it put 54 newbuild product tankers on order, say that shareholders and lenders alike have shown their support for the company's strategy.

Ship & Bunker News Team
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