Tanker firms batten down the hatches

CRUDE-oil tanker rates may have recovered a little towards the end of 2011, but the market remains depressed and vulnerable to slackening global economic growth. That means 2012 is set to be a year of survival and consolidation rather than recovery. Overcapacity in the face of slow and patchy global economic growth ensured that 2011 was another year where fleet utilisation remained limited and slow steaming remained commonplace, against the backdrop of rocketing bunker-fuel prices. But the extent to which tanker rates collapsed in 2011 surprised market watchers. According to the research team at Norway’s Arctic Securities, the day rate for a modern very large crude carrier (VLCC) averaged $20,700 a day in 2011, down by 49% from the previous year; while the Suezmax rate fell by 40%, to $17,600/d. Before the start of 2011, the firm had been forecasting rates more than 50% higher than those that materialised. “The...