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Tanker Industry


king888
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Anyone here follow this industry ?  The shipping industry are all facing the strong headwind due to oversupply.  But the tanker are being hit hardest .The share of the tanker companies are making a new low everyday.

Supertanker are operating at loss. Due to poor outlook in both demand and supply side. Newbuild are coming online but demand for Oil is not growing strong enough.  All of the news are negative.

 

Crude Oil-Tanker Losses Continue as Vessel Surplus Persists

http://www.bloomberg.com/news/2011-09-26/crude-oil-tanker-losses-continue-as-vessel-surplus-persists.html

 

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/099c4870-d58a-11e0-9133-00144feab49a.html#ixzz1ZRr37fKZ

 

“We could see bigger players than [the ones that have already collapsed] disappearing,”

http://www.ft.com/cms/s/0/099c4870-d58a-11e0-9133-00144feab49a.html#axzz1ZRqJkPBG

 

And many bad news if you just search on Google news. 

 

Here is good paper in 2004 from MIT graduate student who worked in the industry also

http://dspace.mit.edu/bitstream/handle/1721.1/17807/56556995.pdf?sequence=1

 

Another interesting presentation by Precious Line Shipping .One of the largest Dry Bulk operator in Asia. Mr. Khald ,CEO , is well regarded as the shipping guru.  He describe the nature of this industry very well. And Dry Bulk is similar industry to Tanker.  He expects the 2011-2012 should be the bottom of the industry. And the good sign of bottom is bankruptcy of another companies .His company plans to add more ships during the consolidation period. But also said that it is very hard to make a prediction in this industry. And most of the predictions in this sector are wrong in most time ( 0:59:00 in the video below) .

Here is the link for the call ->

http://www.dcs-digital.com/setweb/ondemandnew.php?onid=683&&size=b

Slide - http://www.preciousshipping.com/LinkClick.aspx?fileticket=QiW%2fHqEhQXc%3d&tabid=243&mid=722&forcedownload=true

 

 

My point is we might be very close to bottom of the industry (6-12 month). Because the dynamic of the industry . If the outlook is very pessimistic ,the operator has to do something to improve the freight rate .For example, lay-up ship or delay the newbuild coming online.

Here is one positive analyst interview I can find about Tankers. 

http://www.tradewindsnews.com/tankers/

You can scroll down to video section and watch "Tankers should take cover" video from Head of Research of  Gibsons. He said in the interview that while the outlook is very bad. The real outcome could be better due to the "manipulative function" from the operators.  .  He expects next 12 month that rate for VLCC can improve to $30,000 -$50,000/day comparing to negative rate today.

 

Wilbur Ross and Prem also started an private equity to invest in Tanker

http://online.wsj.com/article/SB10001424053111904292504576480523786445958.html

 

 

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I have been watching loosely for a year or so. I plan to buy when the CEO of FRO gets back in and recaps FRO....

 

Correct me if I am wrong. I think FRO and many Tanker operator are foreign companies(bermuda-based) except OSG. So the insiders do not have to file a transaction report.

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It will come out one way or another especially if there is a recap. I have been watching for a year or two and think now is still too early. The time to buy inmo is when there are a few more weak sellers for FRO and OSG. Both should be able to pickup ships on the cheap and right now it seems as though weak hands are holding...

 

With the weak economy I see no rush...

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