Tanker markets 'may weaken further'
Analysts at McQuilling Services say the bottom might not have been reached in global tanker markets and owners could soon be forced to lay-up their tankers.
In a note to Tankerworld on Thursday, the marine industry consultants said that there are about 50 supertankers in floating storage currently and ?as these vessels re-join the fleet, on top of 38 VLCC and 33 suezmax newbuildings expected to deliver before the end of the year, the markets may further deteriorate?.
?In order to prevent possible future losses, and sometimes in hope to impact the markets, tanker owners engage in various fleet rationalization strategies. One of them is a possible vessel lay-up,? said McQuilling.
McQuilling however, added that ?tanker lay-up is not a simple decision to be made.?
McQuilling highlighted that there are two types of vessel lay-up ? a hot lay-up is intended for a relatively short period of time while a cold lay-up is intended for an extended period of time.
Both types have economic and technical aspects and intricacies which owners will have to contend with and balance out according to their fleet rationalization strategies.
McQuilling believes that tanker lay-ups have historically been a product of long periods of low markets and persistently weak market outlook.
?While the market outlook remains relatively weak this moment, this is only the second consecutive month of weak VLCC and suezmax returns,? it said.
?Therefore, the hot lay-up option may start to emerge while consideration of cold lay-up is still likely over the horizon.?