Monday, March 4, 2013

Shrewd Purchasing and Heavy Investment in Bulk Freight Product Tankers May Pay Off

Trade May Have Been Depressed But Someone Believes in the Future
Shipping News Feature

SOUTH KOREA – MARSHALL ISLANDS – MONACO – Despite the depressed state of indices such as the Baltic Dry Index it seems there are some bulk freight carriers out there who can not just smell out a bargain but find the wherewithal to make genuine investments. Scorpio Tankers, incorporated in the Marshall Islands but managed from Monaco and New York announced last week that it had managed to secure four MR (Mid or Medium Range) product tankers which had previously been reserved for another customer of the shipyard.

The Scorpio group ventured into tanker ownership in 2010 at a low point in the history of the bulk cargo carriage industry and it seems the current boss still has an eye for a bargain and faith in the future of that sector. Given that the Managing Director of Scorpio Ship Management and Scorpio Tankers is Emanuele Lauro who started with the group a decade ago knowledgeable readers will understand that with his family pedigree he may just know what he’s talking about.

In addition to the four MR vessels costing around $33 million apiece and all of which are due for delivery by the end of 2014, the shipyard, South Korean Hyundai Mipo Dockyard, is to supply Scorpio with two Handymax ice class-1A (37,000 DWT) product tankers for approximately $31.25 million each due for delivery in the third quarter of the same year.

Scorpio says that the latest ships are a continuation of their newbuild program for fuel-efficient vessels. These new acquisitions come with fixed-price options for the construction of four additional Handymax vessels as well as an extension on previously obtained fixed-price options.

Scorpio now has a total of 26 newbuild product tanker orders with HMD and SPP Shipbuilding Co., Ltd. of South Korea which include 20 MR and six Handymax ice class-1A vessels. Two of the newbuildings are expected to be delivered to the company by April 2013 and the remaining 24 by the end of 2014. The company also has fixed-price options to construct a total of 12 additional newbuilding product tankers at these yards.

All in all it seems that Scorpio is well placed with a panoply of vessels targeted at a market which it feels had little further to fall when planning its forward strategy.