According to Braemar Shipping Services – as of 1st May 2011, the double hull VLCC fleet stood at 530 vessels, of which 9.1% were Chinese owned (48 vessels). Of the orderbook of 158 vessels (29.4% of the trading fleet), 19 (12.0%) are Chinese owned. Assuming 100% delivery, the percentage of Chinese owned vessels will increase to 9.7% of the fleet by end 2014. Of the 48 vessels in the Chinese fleet, 30 (62.5%) have been built in the last five years compared to 38.6% of the non-Chinese fleet.

Over the next four years, based on the current orderbook the Chinese fleet will expand by 39.6%, whereas the non-Chinese owned portion will enlarge by 28.8%. These figures illustrate the vigour with which Chinese VLCC ownership has grown in conjunction with the country’s increased dependence on oil imports, and the momentum with which it is projected to continue in the next three years. Beyond the bounds of the current orderbook, medium to long term growth remains to be seen; will Chinese owned newbuild orders slow with the 50% import target ticked off (see below), or will Chinese owners continue to invest in order to gain an even bigger slice of the pie? The Chinese government is aiming for 50% of seaborne oil imports to enter the country on Chinese vessels. Braemar Shipping Services plc tanker model output suggests that 84 dedicated VLCCs would have been sufficient to meet 100% Chinese demand in 2010. As of the end of the year, there were 48 Chinese owned VLCCs (including 5 single hulls) suggesting that Chinese vessel capacity is easily sufficient to meet the 50% goal.

We anticipate demand to grow to 130 vessels in the next four years, with Chinese vessel supply set to increase to 73. Again these projections indicate that Chinese vessel supply will, in theory, be sufficient to service 50% of seaborne imports. Braemar Shipping Services plc’s analysis of VLCC spot fixture data for vessels suggests that, in 2010, 50.4% of VLCC cargoes were transported on Chinese owned vessels, a 35.4% increase from the 15.0% recorded in 2004. In Q1 2011 however, a 3.4% decrease has been observed with the figure standing at 47%, marginally below the target of 50%. Braemar Shipping Services plc anticipates that China will succeed in its aim of carrying half of its import of Chinese owned vessels, and has the capacity to exceed this. However given the sheer scale of Chinese demand, significant potential for China-bound cargoes cargoes will remain, both on the spot and timecharter markets. Chinese VLCC ownership has become more widespread in the last five years and the current orderbook indicates that this will continue in the short to medium term.

Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com
The views of the Publishers do not necessarily correspond to the views of Lambos Maritime Services Ltd.