Nov. 22 (Bloomberg) -- Following are comments from the Baltic and International Maritime Council, a trade group representing shipowners, following the third-quarter loss of $166.6 million reported by Frontline.
Frontline, the world’s biggest supertanker operator, plunged as much as 45 percent in Oslo trading today after the company said it’s seeking talks with creditors and may need to raise money in 2012.
BIMCO does not comment on specific companies, said analyst Peter Sand by e-mail.
“Earnings on the very large crude carrier or VLCC benchmark route from the Arabian Gulf to Japan show year-to-day rates at $7,500 a day. This compares to representative break-even rates for an normal debt-financed VLCC at $30,000 a day, when you include operating expenses and financing costs. So it’s easy to do the maths, and understand why the whole tanker sector is struggling.”
On the oversupply of available ships in the global fleet:
“In the VLCC sector BIMCO foresees that at least 50 VLCCs too many are operating at the moment. Right now, owners hesitate to lay up, or idle, tonnage as they are afraid to miss out on the historical lucrative winter market where spikes may save the entire year for the owner. This is why we don’t see long-lasting lay ups to a significant extent right now. We only expect a little help from increased scrapping of over-aged ships as most of it left the fleet last year.”
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