Fairplay: Behind the Tanker Bounce

“Asset play in the tanker sector has recovered from the freeze that followed from the credit crunch, according to New York’s tanker broker Poten & Partners. But rather than focusing on the secondhand market, the newbuilding sector has attracted most of the activity, Poten’s weekly report said. “Decisions to invest appear to be driven not just be the fundamentals, it observed, because of what was termed ‘a disconnect between slipping freight rates, weak demand fundamentals and the surge of newbuilding tanker orders seen in recent months’. The report added: ‘Asset values are derived from the expected earning of that asset over its life, but with the tanker market sending mixed signals on the pace of recovery, other forces are ostensibly in play. ‘Since March of 2010, however, the perception that there were assets to be had on the cheap has helped bring tankers back into fashion. Interestingly, it has mostly come in the form of newbuilding activity rather than secondhand purchases of existing assets.’”