The crude and product tanker fleet (10,000+ dwt excluding chemicals) grew by a net 1.98% (11.48M dwt) in 1H20 as a sharp drop in removals offset a slowdown in deliveries. This is down sharply from net fleet growth of 3.77% in 1H19 (20.6M dwt), although this was the highest level in a decade. Growth was led by a net 2.02% rise in the crude fleet (37 ships of 8.31 M dwt) and a net 1.90% increase in the product sector (61 ships of 3.18M dwt). Tanker removals (either through scrapping or conversions to other vessel types such as FPSOs) fell to the lowest level that SSY has on record for the past 20 years. This was as record high freight rates following the collapse in crude oil and product prices in March incentivised owners to delay scrapping to maximise fleet earnings while there were increased opportunities for vessels to be hired for floating storage as excess supply of both crude and products filled up on-land storage and crude and product futures markets moved to a steep contango. COVID-19 lockdown restrictions, meanwhile, halted demolition activity on the Indian sub-Continent and reduced scrapping sales activity, which was further hampered by the pending monsoon season.
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