Prospects in the spot trade for an often overlooked segment of the tanker market-Panamax tankers-are looking up.
This was the verdict of a study released earlier this spring by Poten & Partners Inc., New York, for the 60-80,000 dwt category that makes much of its living carrying petroleum products from producers to markets. The company is an oil tanker and liquefied gas carrier broker and consultant.
So far this year, said the study, Panamax spot market "fixtures" (vessels) are up to about 700 compared with slightly more than 560 a year earlier, a nearly 25% rise.
And rising concern over the age profile of the Panamax fleet could result in a two-tier market with charterers preferring the younger segment of the fleet (Fig. 1).
There are relatively few young Panamax tankers, but there were 50 vessels on order as of mid-April, said the consultant.
Market direction
Fig. 2 shows reported clean and dirty spot fixtures for Panamax tankers between 1995 and 2001.
The spot-market fixture activity lacks a clear trend. After declining for several years, activity has increased, Poten & Partners' data reveal, helped by a more active clean-product market that now accounts for about one third of reported activity.
Fig. 2 also shows that the dominant destination is the US, a growing destination for Panamax vessels.
The Mediterranean and UK are declining destinations, the data indicate, although the Mediterranean picked up in 2001 as did Southeast Asia and the Far East.
Fig. 3 shows the same information as does Fig. 2 but emphasizes how important the US market is for Panamax tankers.
When combined with the Caribbean Basin, said Poten & Partners, the North America market represents slightly less than two thirds of all destinations. Many of these cargoes are fuel oil because a significant number of US electric-generating plants burn fuel oil. Some natural gas-burning plants even have dual-fuel capacity and at times have switched to fuel oil in response to high natural gas prices.
Western growth
Fig. 4 shows the relative importance of US East Coast destinations for Panamaxes and the growing importance of the US West Coast.
Fig. 5 shows from where cargoes destined to North America emanate. The load areas are clearly more diverse than they were 6 years ago, said Poten & Partners. Fig. 5 also shows that there has been significant growth in the volume of spot-market vessels from the west coast of Central and South America and the UK load areas to the US.
Thus, observed Poten & Partners, the increased cargo liftings to the US are also accompanied by a lengthening of the average voyage, which means that ton-mile demand is actually growing at a higher rate than the number of cargoes.
