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Dr Stopford looks to superbuilders print
Yes, it's finally happened! A tanker crisis that doesn’t involve an oil spill. Now everyone from the president of OPEC downwards is worrying that a shortage of tankers will bring the world grinding to a halt. The story, which has been sizzling around the media all week, leads to just one question. How soon can we build some new ones?
Calling Super-Builder
So the eyes of the world are on the shipyards. Can these worthy engineers whistle up a fleet of new tankers soon enough to save us from freezing in the dark? It's an interesting question. Tanker investors have been very busy this year. By the end of August they had ordered 23.8m. dwt, pushing the orderbook to 46.7m. dwt (16% of the fleet).
But now berths are in short supply. Our graph suggests that capacity is fully booked until mid 2003. There is the odd berth in 2002, but serious investors face a three-year wait.
Swinging shipyards
Luckily that’s not the whole story. The equally massive bulk carrier orderbook starts to run down in August 2002. That will free up quite a bit of capacity and the way sentiment is plummeting in the dry bulk market there will not be many follow on orders. Much the same is true of containerships, which wind down even earlier in Spring 2002.
Of course you can't switch all berths from one ship type to another, but many can if the price is right. So this could provide a welcome source of early supply.
Make Me an Offer
How much extra? As a rough illustration we calculated the tanker output if half the available bulker capacity switches to tankers. The results, shown in our graph, say 21.7m. dwt in 2002 and 27.3m. dwt in 2003. On these figures, by December 2003 an additional 77m. dwt of tankers would be delivered.
That is an interesting number because, by the end of 2003, 76 million dwt of tankers will have reached the magic age of 25. So if all of these ships are replaced (which many regulators would regard as an unac-ceptably lenient outcome), the yards might just about produce enough ships to replace the old fleet.
The Shippy Shippy Sheik
So far so good, but we have only ac-counted for replacement of ageing tankers. What happens if demand grows? This has not been a problem recently. Thanks to the Asia crisis, in the last three years tanker demand has only grown by 10m. dwt. But if the world economy continues boom-ing and the oil comes from the Mid-dle East, it could be a different story.
Slipway to Riches, Captain
So there you have it. The world needs its shipbuilding friends to build some new tankers. So if you're a ship-builder and you’re worried you may not have the capacity, our advice is this. Keep trying. You could give berth to a fortune! Have a nice day. |
