DREWRY: TANKER ORDERS COULD SPAWN SURPLUS DURING EARLY 1990S
The 44 million dwt order book for crude oil tankers at the end of last year could cause a surplus of tankers in the early part of the 1990s, Drewry Shipping Consultants Ltd. Warns.
The London firm said the bulging order book gives cause for concern, although Drewry recognizes that aging tonnage needs to be replaced.
"Unless there is a sudden, sizable increase in scrapping," Drewry said, "it is almost inevitable the balance between supply and demand in the larger sectors will move in the wrong direction in the early 1990s."
Drewry also said the Middle East war dealt a jolt to the tanker market.
In its main case, the consulting firm projects Middle East crude prices will stabilize at about $20/bbl before rising gradually to approach $30/bbl by 1995, the pipeline to the Mediterranean will remain embargoed until next year, and Kuwait's export refineries will go back on stream only gradually between 1992-94.
In that case, total seaborne oil trade will grow by only about 1%/year, compared with an average growth of about 6%/year in 1985-89 and 3% during 1990.
Tanker owners would fare better if the crude price stayed as low as $15/bbl, Drewry said. In that case, world crude oil trade would grow by 2.5%/year, which would generate an added 2 million b/d of oil for export from the Middle East in 1995.
SCRAPPING SITES
Drewry said the availability of scrapping sites for large tankers will become a critical factor in shedding unwanted vessels the next couple of years.
Current facilities are very limited and owners may have to choose low cost layups as a temporary solution until more sites can be found.
After allowing for an increase in scrapping, size of the current order book and schedule of deliveries, the fleet will continue to increase.
By 1993 it is projected to reach a peak of 267 million dwt, although it will begin to fall after that as scrapping of tonnage built in the mid-1970s becomes inevitable.
Drewry said during the last 5 years the tanker industry has been able to draw on spare tonnage and improvements in operating efficiency to meet the growth in trade and ship demand.
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