Gibson Shipbrokers released their latest report informing about the lack of ice class fleet ordering activity in recent years. Most of the recent newbuild investment has gone into Aframax tonnage with a mix of Finnish/Swedish ice class 1A and 1C orders.
Last November Sovcomflot (SCF) invested heavily in ice class 1A tonnage, ordering six Aframaxes. Last month the company announced long term time charter agreements for two of these units. Back in October 2016, Euronav ordered ice class 1C Suezmaxes, with seven year time charter attachments to serve the Quebec refinery to replace some of their older units.
Today 68% of the whole ice class fleet today is over 10 years of age. Analysis of the tanker orders shows that a few ice class units are currently firm orders, most already with committed employment. Moreover, given that ice class tankers spend the greater part of their working lives in the ECAs, the impact of the 2020 sulphur legislation will be limited. However, over the next few years many units will be required to invest in Ballast Water Treatment systems. Also, ships have to comply with the Polar Code by their first renewal survey.
However there is demand for these specialist vessels. Trading routes are changing across the tanker market and the ice trade is no exception. Recently, Russia informed that it wants to increase traffic tenfold along the Northern Sea Route by 2025.
Another example will be changes in the Baltic trades. Transneft stated that crude exports from Primorsk are expected to decrease after 2018 due to increased exports to the Asian market, primarily China, reducing the volumes shipped from Baltic ports at least for this year. However, product exports through the Baltic are expected to increase because of the modernisation Russian refineries and a favourable tax system.
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