Tradewinds: Out with the old…

“Eco tonnage is all the rage in the product tanker segment but timing continues to be the key to achieving a return on your investment, according to Poten & Partners. “‘Based on this comparison, in the current rate environment, the investor appears to be better off continuing to trade the older vessel, rather than buying a new one,’ Poten said. “‘Small variations in these assumptions change the relative economics of these investments,’ Poten explained, adding: ‘More important however, is the expectation of what happens at the end of the charter. The non-ECO vessel will be 15 years old and may have a more difficult time finding employment in a market where ECO tonnage will have become the standard.’ “Poten pointed out that this would likely have a significant impact on the residual value of an older vessel that isn’t equipped with features designed to reduce fuel consumption. ‘Ultimately, the key to investing in the tanker market is, and always will be, timing,’ the firm continued. ‘When you time your entry and exit right, it almost does not matter whether you buy a modern or an older vessel, as long as you acquire it at the beginning of the cycle.'”