Tanker stocks ready to rise?

[ron]

Feb 20, 2008

Bosporus Strait Reopens to Tankers

Turkey's Bosporus strait, a link for shipping crude oil from ports in the Black Sea to Europe, reopened to tankers after snow cleared, Master Maritime Agencies Inc. said. Seven crude oil carriers were due to navigate the waterway today, the Istanbul-based shipping agent said in an e-mailed note today. The strait closed to tankers on Feb. 18.

Source: Bloomberg

[ron]

AP
Monday February 25, '08
Capital Product Partners Signs Deal to Acquire 2 Double Hull Tankers for Combined $118 Million

NEW YORK (AP) -- Greek tanker owner Capital Product Partners LP said Monday it's signed a nonbinding letter of intent to buy two vessels from Capital Maritime & Trading Corp., the owner of its general partner, for total of $118 million.

The deal is expected to be completed by April.

The first vessel, valued at $95 million, is a 2001-built, 159,982 deadweight ton double hull tanker.

The vessel is chartered to BP Shipping Ltd. under a charter at a gross rate of $36,456 per day. The charter has a term through at least January 2011, and includes a profit-sharing arrangement that calls for BP and Capital Product to equally split any additional revenue.

The second, worth $23 million, is a 12,000 deadweight ton double hull product tanker built in 2005. The tanker is chartered to Shell International Trading & Shipping Company Ltd. until at least March 2010, at a gross rate of $13,250 per day.

Capital Product Partners expects to fund the purchase with $2 million in available cash and $57.5 million through its new revolving $350 million credit facility. The remaining amount will be funded through an offering of 2.55 million common units to Capital Maritime at a price of $22.94 per unit.

Capital Product Partners expects the two vessels to boost operating earnings by 8 cents per unit annually, excluding any profit-sharing agreements.

Source: AP

[ron]

Feb 25, 2008
By Alaric Nightingale

The cost of shipping Middle East crude to Asia, the world's busiest route for supertankers, may rise for a second trading day because of reduced vessel supply. There are 65 very large crude carriers, or VLCCs, available for hire within the next 30 days, according to a Feb. 22 report from Paris-based shipbroker Barry Rogliano Salles. That's half the 129 ships for hire a month ago.

''The tonnage situation is quite balanced,'' Halvor Ellefsen, a broker at SeaLeague AS, said in an e-mail today. ''There's definitely a chance'' ship-hire rates will rise.

PTT Pcl, Thailand's biggest energy company, hired the tanker Tenki for 121.5 Worldscale points, according to a report today from Athens-based Optima Shipbrokers. That's 3 percent above the London-based Baltic Exchange's comparable assessment of 118.75 points for voyages to Singapore.

Tenki is fitted with a double hull to cut the risk of an oil spill. That makes it more expensive to hire than single-hulled ships. The London-based Baltic Exchange's assessment for voyages to Singapore is for tankers up to 20 years of age, of which 72 percent are fitted with full double hulls. The exchange's benchmark assessment, for shipments to Japan, climbed for the first day in three on Feb. 22, advancing 1.8 percent to 115.63 Worldscale points.

Worldscale points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

Hire Rates

Each flat-rate assessment gives owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.

At 115.63 Worldscale points, owners VLCCs can earn about $82,291 a day on a 39-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg marine-fuel prices.

Frontline Ltd., the world's biggest VLCC operator, said Feb. 15 it needs $31,400 a day to break even on each of its supertankers.

Bookings for VLCCs sailing from the Middle East to Asia account for 47 percent of global demand for the carriers, according to New York-based McQuilling Brokerage Partners LLP. Shipments to the U.S. and Caribbean, the second-biggest market, account for 14 percent of demand for supertankers.

Source: Bloomberg

[ron]

March 8, 2008
By Karen Remo-Listana

The oversupply of vessels in the tanker market will soon be offset by the removal of non-double hulled tonnage, while the additional fleet growth will be absorbed by the growth in demand, a senior official from an international shipping consultant and shipbroker said.

Dr Philip Rogers, head of research at Galbraith's, said fleet growth will outpace demand in 2009 leading to a "slightly softer" market. But by 2010 although the overall market surplus for Very Large Crude Carriers (VLCCs) will be greater than the year before that the rates will be firmer.

"In 2010, we expect that rates may be firmer as the main phase out of non-double hulled tankers kicks in and China and South Korea prohibit single hulls trading to their ports and terminals," Rogers said.

The market will further tighten in 2011 and 2012, he said, adding that strong economic growth in the Middle East will also keep up pace of demand in the Gulf. The dry bulk sector, however, will continuously rally an upward trend for more than 45 years.

"Chinese demand is at exceptional levels and is expected to grow further this year, he said.

"India is finally emerging as a significant importer of coal and raw materials after years of only being seen as an iron-ore exporter."

The order book, which currently stands at 228.8 million deadweight tonnage, is at record levels and can accommodate a cargo growth of 1,200 metric tonnes. Of this total, 171.5 million dwt is for delivery by 2010, shows his paper presented to Marine Money conference in Dubai. Demand is therefore expected to grow by about 405 metric tonne over this period hence an excess capacity. However, even if demand has been underestimated by 200 per cent, the fleet capacity surplus is still evident, said Rogers.

Although the fundamentals are consoling, there are still a number of factors that are not within the control of the shipping industry, he said. One of the main concerns is the shortage of labourers and material supply. "Will all the Greenfield shipyards be built, and even if they are, where will the skilled workers come from? Will all the main engines and cranes be delivered on time," questioned Rogers.

Source: Zawya

[ron]

March 3, 2008 - Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipbuilder, said Tuesday (March 11) that it has won a deal worth $602 million to build eight container ships.

The deal with a European shipping company calls on Daewoo Shipbuilding to deliver the vessels by January 2011, the shipbuilder said in a regulatory filing.
Shipyards in Korea, the world's largest shipbuilding nation, have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world.

Shares of Daewoo Shipbuilding were trading at 31,600 won as of 9:41 a.m. on Seoul's bourse, up 2.43 percent. The shipyard has clinched deals valued at $1.9 billion to build 15 ships so far this year. Daewoo Shipbuilding aims at winning $17.5 billion worth of orders this year.

Source: Korea Net