Large increase in oil tanker market delivery volume and lowest ship dismantling volume in 10 years

- Feb 20, 2020-

The Baltic Maritime Transport Association (BIMCO) said recently that crude oil ship delivery increased by 37% this year, while ship dismantling fell to the lowest level in 10 years, a 52% decrease over the previous year; new ship orders remained at a low level, with contract tonnage down 48%.            

In a market full of uncertainty and geopolitical turbulence, BIMCO maintains its position and turns to market fundamentals to eliminate the fog of market speculation and uncertainty driven speculation.            

"In the first nine months of 2019, there was a substantial increase in deliveries compared to last year, especially in the crude oil ship sector, which saw a 37% year-on-year increase. In the same period, the volume of ship demolition decreased by 52%. When the two are combined, the problem of excess capacity emerges again. " Peter sand, chief shipping analyst at BIMCO, said.            

According to BIMCO, the delivery volume of crude oil fleet has increased dramatically. In the first nine months of this year, 23 million dwt have been delivered, an increase of 37% compared with the same period last year. The total tonnage of bulk carriers increased by 28% year on year to 29 million dwt.            

Many shipowners chose to deliver in January to nominally reduce the ship's birth age, which partly explains the phenomenon of centralized delivery in January 2019, in which 12 3.7 million dwt VLCCs were delivered.           

 "In the first nine months of 2019, a total of 53 VLCCs were delivered, reaching 16 million dwt. In addition to the decline in ship dismantling activities, the growth rate of the whole crude oil fleet from January to September reached an amazing 5.4%, "Peter sand said.           

 In terms of ship dismantling, only 10 million dwt was dismantled in 2019, a decrease of 52% compared with the same period last year. Even though ship dismantling activities are relatively high in recent years, the number of ship dismantling activities in 2019 is particularly low. In fact, this is the lowest annual level since 2007.            

BIMCO said that ship dismantling almost stopped in September, with only 300000 DWT sent to the Shipbreaking plant.            

In the fourth quarter of 2019, freight rates in the commercial shipping market soared, especially in the area of crude oil transportation, to some extent in bulk transportation. Recent attacks on Saudi oil facilities and US sanctions on Iran have resulted in an average freight of $307888 per day for VLCC on October 11, 2019. Since then, freight has declined, but it is still very high.            

Orders remained low throughout 2019, with all segments down from last year. Overall, in terms of tonnage, orders for new vessels decreased by 48% compared with the first nine months of last year. But judging from the large number of orders in 2017-2018, this will definitely affect the market in the next few years.