The richest investors in shipping are buying gasoline tankers, anticipating that fuel demand will expand faster than the fleet for the first time in nine years.*See:
Global shipments will jump 4.3 percent in 2012 as vessel capacity gains 3.7 percent, according to London-based Clarkson Plc (CKN), the world’s largest shipbroker. Daily rates for Medium- Range tankers, each hauling enough fuel to fill about 780,000 cars, will rise 19 percent to an average of $14,844 this year, the median of 10 analyst estimates compiled by Bloomberg shows. That’s more than the $10,999 anticipated in forward freight agreements, traded by brokers and used to bet on future rates.
John Fredriksen, whose publicly traded assets are valued at $9.27 billion, ordered as many as 10 of the tankers last month. Wilbur Ross, whose company manages about $10 billion of assets, was part of a group buying 30 vessels in September. Global refineries are shifting to India and China from Europe and the U.S., increasing delivery distances and tying up vessels for longer, effectively boosting demand for shipping.
“This is smart money that has historically done well investing at the right time of the cycle,” said Jonathan Chappell, an analyst at Evercore Partners Inc. in New York whose recommendations on the shares of shipping companies returned 9.8 percent in the past three months. “Those purchases by Ross and John Fredriksen confirm that the fundamentals appear most attractive for product tankers.”
MR tanker rates averaged $12,500 last year, 29 percent more than in 2010, according to Credit Suisse Group AG.
That’s different from most of the rest of the shipping industry. Earnings for very large crude carriers, about eight times bigger than MRs, averaged $22,137 in 2011, down from $42,616 in 2010, Clarkson data show. Capesizes, the biggest coal carriers, got an average of $15,639, compared with $33,298 a year earlier, according to the London-based Baltic Exchange, which publishes costs along more than 50 maritime routes.
Fredriksen, 67, ordered six MR tankers valued at $210 million last month from Changwon, South Korea-based STX Offshore & Shipbuilding Co. and took an option for four more. Ross invested about $300 million in Diamond S Shipping of Greenwich, Connecticut, which bought vessels from Cido Tanker Holding Co. It was the 74-year-old’s first investment in shipping....MORE
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