Despite somewhat increased activity in terms of new orders in the product tanker sector in the first nine months of 2017, the orderbook remains at historically low levels, as disclosed by Capital Product Partners L.P. in a market commentary.
The MR product tanker orderbook currently stands at 7.2% of the fleet, the lowest level on record.
In addition, product tanker deliveries continued to experience significant slippage during the first nine months of 2017, as 33.5% of the expected MR and handy size tanker newbuildings were not delivered on schedule. It is estimated that the net fleet growth for product tankers will amount to 4.5% in 2017, below the 2016 growth rate of 6.2%.
On the demand side, a growth of 3.7% is expected in 2017 on the back of growing intra-Asian and Middle East-Asia products trade and firm products imports into Latin America.
With regard to the Suezmax orderbook, at the end of the third quarter of 2017 Suezmax newbuilding orders represented approximately 11.0% of the current fleet.
Contracting activity continues to be limited, as 12 Suezmax tankers have been ordered since the beginning of the year, the market commentary reads.
“Analysts estimate that slippage for the first nine months of 2017 amounted to 15.5% of the expected deliveries. In terms of demand, Suezmaxes are projected to experience solid growth of 7.2% in full year 2017, driven by a significant increase in US exports this year, higher crude volumes from the Atlantic to Asia and strong Chinese crude oil imports,” Capital Product Partners added.
What is more, the overall tanker demolition activity has increased with 7.1 million dwt being sold for scrap in the first nine months of 2017 – representing an increase of 5.6 million dwt over the same period last year.