Oil Plunge Stalling Demand for Supply Vessels, Tugboats

Published By : 28 Jan 2015 | Published By : QYRESEARCH

The second largest ship builder in Japan, Japan Marine United Corp., stated that the demand for support vessels and offshore supply has been dampened since the price of crude oil has fallen to a six year low.

The firm was created by the merger between steelmaker JFE Holdings Inc. and IHI Corp. It is the only producer in Japan of anchor handling tugs for drilling rigs and platform supply vessels.

Shinjiro Mishima, the President of Japan Marine United, said that the overall interest in their oil vessels has become quiet. The status of manufacturing has been changed to a passive, wait-and-see stance. He said the market trend was visible since last year, and has carried on into 2015.

The rival companies of JMU have also been experiencing a slower than normal demand while the excess global supply quotes oil prices to have reduced to nearly 50% since June. The largest deepwater producer, the Brazilian Petroleo Brasileiro SA, is also reviewing its current five year investment plan of US$220 billion.

The recent dip in oil prices has put at risk all new orders for offshore vessels. The overall outlook of crude oil carrying tankers, however, looks brighter. The oil tanker is one of JMU’s top products out of three, the other two being bulk carriers and container ships.

Mishima has estimated that the fallen crude oil price will probably cause growth in the sea trade to Japan and China. The shipping market, although now being in excess supply, is getting better while China manages to gain the advantage of slashed prices in an effort to increase their stockpile of oil.

Mishima mentioned that the replacement timings on oil tankers could certainly be faster.
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