Construction boom in product tank will push rates down in 2015

With the biggest growth in contracts for new product tankers since 2007, the years 2015 and 2016 will be characterized by contracted rates once the newbuildings start to hit the water, says analysts McQuilling.

The immense orderbook in product tank has reached a size that will have a negative impact on the rates, especially in 2015 and 2016, once the many newbuildings start to hit the water, says analysts McQuilling Services in a Tanker Market Outlook on Friday.

Newbuilding contracts in tank increased to a total 392 ships in 2013, the highest level since 2007. The majority of these contracts are for MR2 (Medium Range), with 223 orders in total, a development that "continues to cement our belief that clean tanker rates are in store for a supply driven contraction. This reality will gradually emerge as previous years' orders deliver from yards, especially in 2015 and 2016," says McQuilling.

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