Reading The Orderbook

27 Apr 2018; 

While the tanker market has remained in the doldrums so far this year, demolition has picked up substantially.  That makes sense.  That is what we expect to happen when the freight markets turn down for an extended period of time.  Another thing that we expect under these circumstances is a decline in newbuilding orders.  When tanker rates are hovering around (and sometimes well below) operating expenses, who would want to (or can afford to) build expensive new vessels?  Surprisingly, newbuilding orders are continuing despite low rates, stretched balance sheets and a general lack of financing?  What is going on?

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