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February 2005 21 Spot Market Summer came to a close and rates were expected to drop before winter blew in with full force. Rates instead began to increase quickly, slowing for a bit in October then gaining momentum in November. Rates hit a yearly high when the Sunlight Jewel (1993 built 280,000 DWT) was reportedly fixed by Marathon in November for WS 240 ($177,000/day). The average earnings per day in November for an AG/USG Route was $153,000/day, tripling November's average from 2003. But what goes up must eventually come down, rates began dropping in December , as cargoes thinned out and hesitation for what 2005 may bring began to stir, Marathon fixed the Safwa (2002 built 303,000 DWT) for WS 130 (89,000/day). Vessels going East also saw a dramatic jump in rates the fourth quarter. Rates peaked in the low WS300's, ExxonMobil fixed the Arosa (1993 built 291,000 Dwt) for WS 315 ($226,000/day). As each week passed in December rates dropped lower and lower, averaging for the month at about WS 150. West Africa rates also spiked in November with rates over WS300, but rates dropped off quickly in December to WS 160. Koch fixed the Astipalia (2001 built 306,000 Dwt) for WS 165 ($107,000/day). Newbuilding & Secondhand Sales In 2004 the newbuilding market prices continued their upward climb, hurdling over the $100M mark in the third quar- ter and closing at an average $110M for the fourth quarter. Since the close of 2003 the newbuilding sales price has increased over 40%. Two of the record second-hand sales included Metrostar's purchase of the 2002 built Oriental Topaz (319,430 Dwt) for $116 million and the 2003 built Violando (309,234 Dwt) from Goulandris for $122.5M. Dr. Peters jumped right into the action with the purchase of two sister ships from Pacific Star, the 1998 built Neptune Glory (299,127 Dwt) and the Saturn Glory (299,127 Dwt) for $88.5M each included a charter back to seller for 7 years at $41,760/day. Arlington Tankers, a new public tanker company set up by Stena acquired 2 Concordia V-Max tankers for $120M each, the 2001 built Stena Vision and Stena Victory (314,000 DWT). The Clipper Group and Fred Cheng's Shinyo International have creat- ed a joint venture called Van-Clipper, which has already agreed to purchase two vessels the 1988 built Seryna (240,000 Dwt) and 1992 built Astro Lynx (244,000 Dwt). Fleet Additions & Deletions The VLCC demolition market came to a complete standstill during the third quarter spilling over into the fourth quarter with increasing spot rates entic- ing owners to hold onto their vessels. Even with high available scrap prices owners chose to stay in the spot market. The demolition market has steadily decreased over the last three years. In 2002 a record 44 VLCC vessels were scrapped, decreasing to 29 in 2003. In 2004 a mere 12 VLCC vessels were scrapped, down nearly half since 2003. Although the demolition market quieted down the last quarter the VLCC deliver- ies remained steady with 7 VLCC ves- sels delivered the fourth quarter bring- ing the total deliveries to 30. The Delos (306,000 Dwt) delivered this month and was also sold this quarter to Ghandour by Aeolos for $125M. With 30 vessels delivered and 12 vessels departed, the net trading inventory of VLCC's increased by 18 vessels to 444. Going forward, a substantial orderbook exists and minimal mandated scrapping under IMO 13G promises a similar fleet build in 2005. Circle 224 on Reader Service Card want to cut cost & increase safety? Select for your LNG carrier and Tanker fleets ‘Marlow Steelite’ high modulus synthetic fibre ropes for mooring lines & emergency towing systems. OCIMF approved to replace wire mooring lines. This ultra lightweight rope with a strength equal size for size to a steel wire rope is virtually maintenance free, is proven to significantly reduce mooring times, with an increase in overall service life. The Preferred Connection Telephone: +44 (0)1323 847234 E-mail: marine@marlowropes.com www.marlowropes.com Circle 233 on Reader Service Card Source: McQuilling Services, LLC is a busi- ness consulting enterprise formed to provide services to clients in the oil and marine trans- portation industries. The primary focus of McQuilling Services, LLC is to provide com- mercial consulting services to clients trans- porting bulk commodities internationally. Through McQuilling Services, LLC, we offer clients business consulting and commercial advisory services in the areas of manage- ment consulting; market research and analy- sis; marine systems and transportation logis- tics analysis; project analysis; Information technology application; shipbuilding technolo- gy transfer; and, personnel training. McQuilling Services, LLC, Tel: (516) 227- 5700; Email: services@mcquilling.com; www.mcqservices.com Tanker Market Snapshot • VLCC MR FEBRUARY 2005 #3 (17-24).qxd 2/2/2005 9:32 AM Page 5
