1 March 2019: The tanker market is at somewhat of a crossroads: Trade flows are changing due to rapidly growing exports from the U.S. to Asia, one of the longest trade routes in the industry. On the other hand, due to regulatory changes, owners are required to make tough choices on how to keep operating older tonnage. The poor freight market in the first three quarters of 2018 led to the highest volume of tanker removals for at least the last 15 years. When freight rates improved in the fourth quarter, demolitions dried up. At the same time, newbuilding prices remain relatively competitive as shipyards are trying to fill their depleted contract portfolios. What should an owner respond to these contradictory market signals?
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