Mitsui OSK Lines Ltd., the world's largest oil and liquefied natural gas shipping company by capacity, expects chartering rates of very large crude carriers to start rising again in early 2011 due to the scrapping of single hull tankers, but sees persisting weakness in LNG rates. Rates for VLCCs on Middle East-East Asia routes have fallen sharply since late 2008, hitting a low of Worldscale 27 in May 2009, the lowest in over a decade. They peaked just above WS200 in Aug 2008.
"This (low rates) will last throughout 2010 and perhaps into early 2011," Toshiyuki Sonobe, director of MOL's Tanker Division told Dow Jones Newswires.
Low rates will accelerate scrapping of single hulled tankers during 2010, which in turn will result in higher rates, Sonobe said.
Under the Convention on the Prevention of Marine Pollution, the use of single hull tankers will be banned from 2011 unless they are revamped to reduce their vulnerability to oil leakage.
Energy buyers in many countries, including China, are already proactively avoiding accepting single hulls, said Sonobe.
There are now about 550 VLCCs worldwide, of which about 100 are single hulls, Sonobe said.
Also, around 180 new double hull VLCCs are planned or under construction and will join the shipping market over the next two or three years.
"This (low rates) will last throughout 2010 and perhaps into early 2011," Toshiyuki Sonobe, director of MOL's Tanker Division told Dow Jones Newswires.
Low rates will accelerate scrapping of single hulled tankers during 2010, which in turn will result in higher rates, Sonobe said.
Under the Convention on the Prevention of Marine Pollution, the use of single hull tankers will be banned from 2011 unless they are revamped to reduce their vulnerability to oil leakage.
Energy buyers in many countries, including China, are already proactively avoiding accepting single hulls, said Sonobe.
There are now about 550 VLCCs worldwide, of which about 100 are single hulls, Sonobe said.
Also, around 180 new double hull VLCCs are planned or under construction and will join the shipping market over the next two or three years.