MISC sees demand for its new tankers

MISC Bhd is confident that the long-term prospects for the crude oil shipping market will be positive to support its recent order for four new 320,000 deadweight tonnes (dwt) very-large crude carriers (VLCCs).
The vessels, scheduled for delivery between December 2012 and October 2013, cost US$430mil (RM1.38bil).
MISC announced on Tuesday last week that its wholly owned subsidiary, AET Inc Ltd, had signed a contract with Daewoo Shipbuilding & Marine Engineering Co Ltd for the purchase of the four tankers, using internal funds.
An AET spokesman said although it would not be possible to accurately predict the market that far into the future (2012–2013), AET was confident about the long-term prospects for the crude oil shipping market, noting that the four tankers were for long-term investment.
“The addition of these vessels to our fleet supports our overall growth strategy to provide greater availability to our customers and fulfil their global oil transportation needs.
“We know that our customers have a requirement for VLCCs that we are not currently able to fill and we are confident that our customer relationships are strong enough to ensure that these vessels will be fully employed upon delivery,” the spekesman told StarBiz.
The group now has eleven VLCCs, all of which are operated by AET in its capacity as the petroleum shipping arm of MISC.
Going forward, AET believed that it would require a fleet of about 150 tankers to provide efficient global services and availability levels to its customers.
“This growth will be achieved through a combination of new-building orders, asset acquisitions, charter arrangements and partnerships with like-minded operators.
“We will remain poised to take advantage of any favourable asset prices and other purchase opportunities as they arise,” the AET spokesperson said.
AmResearch said the tanker shipping market was improving, with year-on-year growth in charter rates in recent months after 17 months of contraction. “Dirty tanker rates have staged a rebound in recent months. Rates for VLCC, suezmax and aframax vessels are now showing positive growth,” it said.
The brokerage said spot rates seemed to have rebounded much stronger than one-year time charters, with year-on-year growth ranging from 17% to 86% for June.
“The VLCC segment has staged the strongest year-on-year improvement at 34%, supported by usage of VLCCs as storage, which takes out a certain amount of supply in the market,” it said in a report.
In terms of market capacity, AmResearch said that since early 2009, actual tanker deliveries had been slipping behind schedule, which had helped to tone down the supply of vessels into the market.
“We estimate that scheduled deliveries amounting to 17 million dwt had disappeared from order books (accounting for 28% of scheduled deliveries) – either delayed or cancelled altogether last year,” it said, adding that the scrapping of old vessels was also expected to pick up by the year-end.
AmResearch believed that MISC’s suezmax acquisition, at US$67.8mil per vessel, was done at a fair price, considering the current suezmax new-build price was US$67.5mil.
“MISC’s capacity build-up, particularly in the tanker segment, coincides with its recent acquisition of a 50% stake in international tanker terminal operator VTTI BV, which also marks the start of a strategic partnership with VTTI’s parent, Vitol.”

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