Tradewinds: Buyer Beware

“According to Poten & Partners, uncoated panamaxes are now a minority, which is why the future is looking increasingly uncertain for tonnage that is still dedicated to the carriage of crude. In a weekly industry briefing the brokerage noted that this corner of the market has changed considerably over the past ten years but continues to be driven, in large part, by activity in the west coast of the Americas and Caribbean. While this is consistent Poten also pointed out that the overall volume of dirty panamax spot fixtures has ‘declined dramatically’ since the start of the last decade. “In 2002 the firm claims approximately 1,400 fixtures were sealed over the course of that year. In 2013 there were slightly more than 600 and the tally for 2014 currently stands at 430. The company attributed this trend to changes in the fuel oil market and a shift in trading patterns on the west coast of the US, Central and South America. In addition to the sharp decline in activity Poten argued that the orderbook reflects what it described as ‘diminishing opportunities’ for tonnage involved in the dirty panamax trade. “’Only about 25% of the existing fleet is uncoated and, according to our information, 35 of the 37 panamax vessels on order are coated tankers,’ it added. “Won’t disappear “While the outlook looks bleak the brokerage was quick to point out that this doesn’t mean the segment will disappear altogether since panamaxes are well-suited for certain ports in South America and the Caribbean because of their size. ‘Also, when the crude aframax market skyrockets, panamaxes may be drawn into the dirty trade, since all coated vessels have that flexibility,’ the company continued, adding: ‘So what is the owner of a dirty panamax tanker to do? Stay close to the key charterers that trade to some of the restricted ports around the Americas, try to take advantage of the Panama Canal restrictions while they last, and if somebody for some reason wants to buy your vessel… consider their offer carefully!'”