2024.09.13

Shipowners spend $135bn on newbuildings, more than double the 10-year average

Shipping companies have spent $135.4 billion on new ships in 2024, with 1,454 vessels totaling 106.4 million dwt ordered by the end of August, a 27% increase from 2023, according to Clarksons Research. The strong demand is driven by favorable market conditions and green fleet renewal programs, though high prices, shipyard capacity constraints, and uncertainty over future fuel technologies are tempering growth. The $135.4 billion total is more than double the 10-year average, making 2024 one of the busiest years for new orders.

Newbuild prices have risen 6% since January, approaching levels last seen in 2008. Crude tanker orders have surged, with 102 ships (22.9 million dwt) added, more than double the five-year average. Product tanker orders have also been strong, with 254 ships (16.2 million dwt) contracted, a 27% increase year-on-year, nearing a record since 2006. LPG carrier orders are close to last year’s record, while LNG carrier demand is up 33% from the five-year average.

Overall, the total orderbook has grown 15% since January to 5,197 ships (329.6 million dwt), with yard output in 2024 forecast to reach 90.1 million dwt.

[SLOW] Tanker Fleet Study _ Number of new tanker deliveries

[SLOW] Weekly Dirty Tanker Research _ VLCC Newbuilding Price

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[SLOW] Daily VLCC Market _ VLCC TCE comparison by routes

Frontline optimistic on tanker market surge as September kicks off recovery

Frontline CEO Lars Barstad is bullish on the tanker market's recovery, historically beginning around September 9th, as highlighted during the Pareto Securities' Energy Conference. He points to rising global shipping volumes and low inventory levels as key indicators for a tightening market. Barstad also emphasizes the impact of the "dark fleet," which consists of older ships trading outside mainstream channels due to sanctions, making up 23% of the aframaxes, suezmaxes, and VLCCs fleet. This limits flexibility in times of market disruption, increasing pressure on supply. Early signs of market improvement were seen with a rise in the Baltic Exchange’s VLCC time charter equivalent from $26,257 per day on 30 August to $34,734 per day on 9 September.

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[SLOW] Oil Market Oil Time Spread Narrowing Brent-Dubai spread amid benchmark futures losing momentum

Falling oil prices spark optimism for VLCC owners as Atlantic loadings rise, Says BRS

The BRS Group forecasts a stronger VLCC market due to falling oil prices, particularly in the Atlantic region. A narrowing Brent-Dubai price spread is making Atlantic oil more competitive, which is expected to boost VLCC demand and revenues, especially for October loadings. Saudi Aramco has cut oil prices to Asian refineries to a three-year low, and further price cuts could follow as Saudi Arabia seeks to maintain market share against competitive Canadian exports. This cheaper oil may increase Chinese imports, though Vitol warns that China's gasoline consumption could soon peak due to the shift toward electric vehicles. The Baltic Exchange VLCC index has surged 45% in a week, with earnings rising to $32,000 per day for Middle East-to-Asia routes and up to $48,000 per day from West Africa to Asia.

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[SLOW] Oil Market LSFO-HSFO Spread Singapore, Fujairah, Rotterdam, Houston

Asia's VLSFO eases as HSFO retains strength amid supply recovery expectations

Asia’s very low sulphur fuel oil (VLSFO) showed signs of easing on Thursday as the backwardation between September and October narrowed to $18.75 per metric ton, following a recent high. Spot market activity for VLSFO was limited, with fewer offers and lower bids. Meanwhile, high sulphur fuel oil (HSFO) retained its strength, with strong premiums for September loading dates, though lower offers were seen for October. The strength in HSFO is expected to be temporary as Middle Eastern supply recovers post-summer. Singapore’s fuel oil storage dropped to a 16-week low, with stockpiles down 10.1% to 16.86 million barrels as of September 11.

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[SLOW] https://slowspace.io/ _ Grangemouth Refinery

Scotland’s only oil refinery to close next year, 400 jobs lost

Scotland’s only oil refinery, Grangemouth, will close in 2025, resulting in the loss of 400 jobs, according to operator Petroineos. The 100-year-old refinery will be transformed into a fuels import terminal. Production will cease in mid-2024, pending an employee consultation. The closure, driven by economic losses and inability to compete with modern refineries, has been criticized by trade unions and politicians. The UK and Scottish governments announced a £100 million package to support affected workers and local energy projects. Petroineos has been losing around $500,000 per day, expecting a $200 million loss for 2024. The refinery’s closure could impact global oil markets as it processes North Sea Forties crude, crucial to the Brent oil benchmark. Long-term plans for the site include exploring low-carbon alternatives like hydrogen and sustainable aviation fuels. Trade unions have expressed concerns, calling the closure an "act of industrial vandalism."

[SLOW] https://slowspace.io/ Grangemouth Refinery  Cargo flow

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[SLOW] https://slowspace.io/  Trade Flow India seaborne crude imports by origin countries

India calls OPEC+ to boost oil output

India has called on OPEC+ to increase oil production to meet its growing fuel demand, according to Oil Secretary Pankaj Jain. OPEC+ recently delayed a planned output increase for October and November, with the possibility of further adjustments. As the world’s third-largest oil importer, India sources over 80% of its oil from overseas. Jain also stated that Indian refiners would consider buying more oil from Russia if prices remain competitive. In July, India overtook China as the top buyer of Russian oil. Indian fuel retailers may reduce gasoline and diesel prices if crude prices stay low.