Listed firms eyeing 2010 purchase spree as prices hit five-year lows.
TANKER companies, including General Maritime and Tsakos Energy Navigation, may expand their fleets after the recession sent ship costs to five-year lows last year.
Prices for five-year-old very large crude carriers dropped to $77.1m on December 14, the lowest level since March 2004, according to price assessments compiled by the Baltic Exchange.
Tanker purchases may increase as the economy recovers from the worst slowdown since the Second World War. Oil demand will rise about 1.1m barrels a day this year and 1.5m in 2011, US Energy Department data show.
?Ship values are low enough now that buying vessels can make sense,? said General Maritime chief financial officer Jeffrey Pribor. ?The key now is not as much waiting for lower values as picking the right time to buy. We have some hopes that timing could be 2010.?
Tsakos has $300m on hand to purchase ships, said Paul Durham, the Athens-based company"s chief financial officer.
?Our primary objective this year is to acquire vessels,? Mr Durham said. The acquisition ?probably will be on the crude-tanker side, such as suezmax and aframax, but we will also look at product tankers?.
Tsakos Energy operates a fleet of 46 ships.
General Maritime fleet of 31 ships included suezmax, aframax and VLCCs, and was down from its peak of 47 vessels in 2004, the company said.
The VLCC price assessment peaked at $162m in July 2008, and is now at $79m.
The price of smaller aframax tankers fell to $37.7m on November 9, the lowest level since January 2004.
Costs were down 51% from the peak of $77m in September 2008 although they rebounded to $39.9m on February 1.
Vancouver-based Teekay Corp, which operates 158 ships, said it has no immediate plans to acquire additional tankers for the spot market.
?We will, however, continue to monitor the markets and consider attractive investment opportunities, particularly assets with long-term, fixed-rate contracts,? said Teekay spokeswoman Alana Duffy.
Newbuilding prices have also fallen. VLCCs are at $95m from $134m at the end of 2008, according to Oslo-based RS Platou Markets. Suezmaxes are now valued at $60m each from $82m at the end of 2008. Aframaxes slipped to $51m from $66m.
About 18% of last year"s expected deliveries were postponed, according to RS Platou.
?The worst of the tanker cycle trough is now in the rear-view mirror,? according to a January report from JPMorgan Chase & Co analyst Jonathan Chappell.
He forecast weak rates in the second and third quarters and a recovery in the last three months of the year.