Tanker newbuild orders cancelled

At least 47 tanker newbuilding orders have been cancelled so far this year according to Ragnar Nielsen of Singapore-based Masterbulk. In total, some 434 newbuilding orders have been cancelled including 298 bulk carriers and 74 box ships. Nielsen said that in spite of the tanker cancellations, the number of bulk carrier newbuildings cancelled “reflects sentiment that the tanker markets will be more stable than the dry bulk segments going forward.”

The tanker newbuilding cancellation numbers are sure to be welcomed by the industry, which has been shadowed by bearish global oil demand forecasts in recent months. Tanker markets and the VLCC spot market in particular, continues to weaken on little activity. Many are blaming reduced oil output from OPEC. Another cause of concern for tanker owners is the record number of tanker newbuilding entries over the next few years.

The latest shipbuilding market report from Lloyd’s Register ? Fairplay Research concluded that tanker markets would be taking a big hit this year. A project manager for the report’s data said: “The tanker sector, like the world shipping industry as a whole, faces a year of overcapacity, weak demand, falling production and low freight rates.” He said the downturn could last a significant time: “It won’t get better in the short term, since there are still a number of new ships from the ordering binge of recent years to be delivered from shipyards in 2009.”

While scrapping will remove some of the older tonnage from the market, the fleet will grow by 6.7% in terms of dwt between 2008-2012, said the report, which estimates the world oil tanker fleet at 358 million dwt having had a previous growth rate of 4.8% annually.