The recent firm sentiment across much of the tanker market has supported relatively significant ordering levels, which has taken the combined crude and products orderbook to 670 vessels of a combined 82.4m dwt at the start of September, equivalent to 17% of the fleet and 13.2m dwt higher than at the start of 2015. But, beyond the cover, how does the tanker orderbook read?

An Intriguing Opening

In the first nine months of 2015 a total of 166 crude and products tankers have been ordered, compared to 208 in full year 2014. Of these orders, 110 of a combined 22.4m dwt have been for crude tankers, the highest level since 2010. VLCC ordering in 2015 has reached 44 vessels of a combined 13.6m dwt, already greater than 2014 levels. Furthermore, crude Aframax contracting has reached 35 ships representing 3.9m dwt, already the highest level since 2007.

Meanwhile, ordering in the products sector has slowed, largely due to an almost complete lack of interest in MR ordering, with just 13 vessels contracted in 2015 so far, compared to 39 in 2014 and 193 in 2013. On the other hand, LR ordering has remained broadly steady with a combined 41 vessels ordered so far in 2015.

Limited Plot Development

The limited product tanker ordering in 2015 has had a marked effect on the orderbook. For instance, the MR orderbook has fallen to 8.2m dwt, 3.3m dwt less than at the start of the year, compared to growth of 2.5m dwt between 2013 and the end of 2014, peaking at 294 vessels of a combined 14.7m dwt in February 2014, equivalent to 30% of the MR fleet. Meanwhile, ordering and deliveries in the LR2 sector have been relatively evenly matched in 2015, with the orderbook standing at 7.8m dwt at the start of September, after growing 6.1m dwt between 2013 and the start of 2015, in particular, supported by 5.2m dwt of orders from EU owners. Similarly, the LR1 orderbook has grown at a sedate pace, in spite of 45 orders placed since the start of 2014.

A Satisfying Read?

Whilst the products tanker orderbook has shrunk so far this year, the crude orderbook has positively bulged in 2015. Firm contracting and limited deliveries in the VLCC sector has led to the orderbook increasing by 9.7m dwt since the start of 2015. Similarly, whilst the Suezmax orderbook contracted 1.4m dwt between 2013-14, this trend shifted during the latter part of 2014 and in 2015 so far the Suezmax orderbook has grown 3.2m dwt. Not to be outdone, the Aframax orderbook has rebounded by 3.4m dwt in 2015 to stand at 8.2m dwt, equivalent to just 12% of the fleet. Although the crude orderbook has grown in 2015, it is currently equivalent to 17% of the fleet, still far below historical peaks and in line with the world cargo vessel orderbook.

So, after browsing the tanker orderbook two things are clear. Firstly, the focus of ordering has shifted, driving growth in the crude tanker orderbook, whilst the product tanker orderbook shrinks. Secondly, an influx of crude tonnage is likely, with 48m dwt scheduled for delivery in 2016-17, whilst product tanker deliveries start to slow. How this extra tonnage is managed will determine if owners get a happy bedtime story, or if they may have to struggle through a nasty twist in the tale.
(Source : Clarksons)