More Old Oil Tankers Bound for Demolition, Forecasts Frontline CEO

by Ship & Bunker News Team
Tuesday December 19, 2017

Oil tanker shipping company Frontline Ltd. (Frontline) foresees shipping firms increasing scrapping of older vessels, which it says could possibly lead to a recovery in tanker rates in the second half of 2018, Reuters reports.

Robert Hvide Macleod, Frontline CEO, suggested that the H2 period of 2018 could hold the potential for VLCC rates to return to levels of $30,000-40,000 per day and Suezmax rate to $20,000-30,000 per day.

Spot rates for very large crude carriers (VLCCs) and Suezmax vessels are currently below Frontline's cash break-even level, with VLCC rates sitting at about $13,000-14,000 per day.

"We're reluctant to predict a strengthening of the market in the short term, even though the current weakness at the start of the winter season is surprising," Macleod told Reuters Monday.

"We've seen increased scrapping activity, from 2 VLCCs in 2016 to 11 VLCCs in 2017. With the weak tanker market and strong prices for scrap steel, we believe this trend will accelerate."

The comments come as an echo of news last month that Macleod believed demand for crude carriers is likely to remain weak until the second half of next year.

Ship & Bunker News Team
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