Oversupply of Suezmaxes expected

Tanker market is expected to see further oversupply of Suezmaxes in the years ahead according to a report from Frankfurt-based DVB banking group.

The surplus of Suezmaxes is reportedly projected to exceed 100 units in 2012. The number of Suezmaxes currently in operation worldwide is estimated at 375 units, and is forecast to reach 436 in 2012.

While demand for this tanker size is expected to increase modestly by around 20 units from the present 303 to 324 in 2012, a large surplus is predicted to emerge. The freight/charter rates per ship for 2009 are assumed to average $29,250/day. Assuming that no more ships are scrapped hereafter, the average rate is reportedly predicted to tumble to $18,500/day in 2012.

DVB pointed out that there will be only limited demand for scrapping Suezmaxes or converting them to offshore facilities such as FSOs or FPSOs as well as to bulkers with the aim of absorbing the expected surplus.