But one has to be careful that the repeated introduction of new regulations does not have perverse effect and contrary to what governments are seeking in general and Madame Loyola de Palacio in particular. In practice, whilst we may regret that in France a company like Services et Transports has decided to leave the shipping scene, we should be aware and sensitive to the warning signals in the global context which is being sent by the Niarchos group (Greece) and Bergesen (Norway) who have decided to get out of the ownership of tankers. Owners of such irreproachable fleets, some of the best in the world, who have been associated with the history of tanker shipping for several decades, have nonetheless decided to no longer run the risk of exposing their non-maritime assets to the enormous financial risks that they are running with their tankers in view of the rules imposed by the E.U. and the American OPA. 

A French, Greek, and Norwegian shipowner have all come to the same conclusion. This type of question should not be allowed to spread, as it then would remain to be seen what sort of type of ship-owner would be left in the longer term to transport oil?
 

The price of VLCC skyrocketed in 2003 and buyers had to fork out more than 30 to 50 % more compared to 2002 depending on the size and type of VLCC. 

44 units changed hands this year compared to 24 the previous year and 37 in 2001. These transactions were therefore well-sustained and the positive prospects on future freight rates has at last allowed modern and double-hulls to become the front-runners, as with the scarcity of available docks. This phenomenon affects all sizes, from VLCC to Panamax. 

Only three units from the 70's were sold for storage projects, such as the t/t 'Berge Bragd' of 310,997 dwt built in 1977 for a price of $10.2 million. Eighteen single-hulls built between 1981 and 1994 changed hands and prices rose steadily as was illustrated by the sale of m/t 'Tamba' of 259,999 dwt built in 1994 for $27.2 million in March 2003 and the sister ship m/t 'Diamond Falcon' for $32.5 million in November 2003. Out of the 18 deals, 9 ships went to Greek owners, who are better qualified to deal with the risks of acquiring single-hull ships. The remainder was divided between Far Eastern buyers and projects for storage conversion. 

The year 2003 is characterised by the considerable number of double-hulled VLCCs sold, as they numbered no less than 23 compared to only 5 the previous year and 14 in 2001. Out of these 23 sales, 15 of them formed part of 7 transactions carried out en bloc. Elsewhere prices kept shooting up over the months, as can be seen with the sales of the m/t 'Picardie' 297,960 dwt built in 1999 for $62.4 million in February and that of the m/t 'World Creation' 300,000 dwt built by the same shipyard one year earlier which achieved $75.0 million in December 2003. And to appreciate the full blast of this price explosion, finally there was the sale of the m/t 'Poros' of 300,000 dwt built in 2002 sold in December for $85.0 million for a quick delivery whereas the 'theoretical' price of a newbuilding is around $75.0 million for delivery in 2007. 

This year, 27 ULCC/VLCC went for scrap against 38 entering into service. This figure is inferior to the 36 units that were demolished last year in a very depressed market. Out of the 27, 8 VLCC were built in 1975 and simply anticipated their destiny by several months due to the new rules of the E.U. which were finally enacted in October 2003. The IMO ruling would have allowed these ships one more year of grace. Sales quite logically were concentrated during the summer months went the daily returns were at their lowest. 

Ships of 120,000 to 200,000 dwt regained favour with the market players. There have been no less than 53 transactions in 2003 whereas we have only registered around 20 during the past four years. This return to grace came about due to a sustained activity in the Mediterranean and in West Africa. They were also able to play their 'swing' role when the VLCCs and the Aframaxes both became scarce commodities in the market. 

Only 2 ships built in the 70's changed hands: the m/t 'Polytrader' and the m/t 'Polytraveller' 125,700 dwt built in 1978, for a price in the range of $4.25 million apiece. A fair number of single-hull ships built between 1983 and 1993 got exchanged, as we saw 14 deals done. In particular there was the sale en bloc of 7 single-hulls: 'Crude Sun', 'Crude Sky', 'Crude Transporter', 'Crude Star', 'Crude Med', 'Crude Target', and 'Crude Traveller'. They were part of one of the biggest transactions of the year, for a total of $517.0 million, consisting of 18 ships of which the 7 Suezmax single-hulls, 6 Suezmax double-hulls and 5 Aframax. The value of the single-hull Suezmax stayed relatively stable in comparison to the rocketing of the VLCC single-hulls. Thus the m/t 'Geres' of 142,000dwt built in 1989 was sold at a price of $19.0 million in December. 

The majority of the deals were concentrated on the modern double-hulled ships, namely 37 of which a good number were done en bloc. The German KGs proved to be particularly aggressive. For example there was the sale of the m/t 'Decathlon', m/t 'Pentathlon' and m/t 'Triathlon' of 150,000 dwt, all three built in 2002, for a price around $55.2 million each to a KG against a 5 year time-charter at $23,500 per day. The value of this type of ship has seen a rise of roughly 25 % compared to estimated values last year. 

The number of Suezmax sold for scrap this year was 10 compared to 15 last year. Twenty-five new ships entered the fleet in 2003.

Transactions of second-hand Aframax doubled between 2003 and 2002, with a total of 70 sales as compared to 35 the previous year. Only three units from the 70's were sold, including the m/t 'Seasalvia', 88,396 dwt in 1979 for a price of about $4.0 million in January. 

The age group between 1980 and 1989 were particularly in demand and 31 sales of single-hulls were registered. Buyers were principally and logically based in the Far East in the context of 'straight' sales, and in Greece for sales which had an employment attached. We can cite the sale of m/t 'Ideal' 99,358 dwt 1981 for $5.5 million to Pakistani buyers and the sale of m/t 'Charles B. Renfrew' and m/t 'R. Hal Dean' of 78,655 dwt built in 1988, en bloc for $19.5 million with 3 years time-charter at $15,000 per day. 

Modern and double-hulled Aframax were in particular demand as 36 changed hands, against only 5 the previous year, with 9 being resales. 10 sales on their own comprised some thirty ships. As examples there were the sales of m/t 'Koa Spirit' and m/t 'Kiowa Spirit' 113,334 dwt built in 1999 as well as the m/t ''Bahamas Spirit' of 107,000 dwt built in 1998, sold en bloc to a German KG for a price of $106.4 million against a 7 year time-charter at $18 000 per day. 

Thirty-five Aframax went to demolition as compared to 20 the previous year. This is to be set against the figure of 75 vessels delivered this year and an orderbook which currently comprises 165 ships. 

The Panamax also enjoyed a healthy volume of trade. 45 ships changed hands in 2003 against 11 in 2002 and 22 in 2001. The breakdown by age was totally incongruous as 17 ships were single-hulls built between 1978 and 1988, whereas 28 other sales were done with double-hulled ships delivered or to be delivered between 1999 and 2005. The category 1989-1998 saw no business. Of the representative sales this year we would cite the following: m/t 'Lucy' and m/t 'Suzanne' of 64,000 dwt built in 1986 for $10.0 million each to Indian buyers and the m/t 'Stena Venture' and 'Sunlight Venture' 70,000dwt built 2002 and 2003, sold for $35.7 million each to a German KG against an eight year charter. 22 ships in this category came into service in 2003. This represents the first course of a gargantuan order comprising of no less than 132 ships! This is perhaps an explication for the numerous deals made to the German KGs this year by Italian and Greek owners. 

The number of Panamax which went to scrap was 23 (including those over 32.20 m in beam but with a deadweight inferior to 70,000 dwt). If one takes into account the exact number of ships demolished with a beam less than 32.20 m, we come to 15, namely two more than in 2002. Scrappings will need to be increased in the short term in order to keep a tighter balance between supply and demand for Panamax tonnage, as 132 units are already ordered at the end of 2003.

If ever there has been a market which has been turned around by events in 2003, and in the best sense, it is with the OBOs. This category of ship has benefited no only from the improvement in the oil sector, but especially from the fabulous boom in dry bulk. As a result prices have been moving upwards right throughout the year. 

Consequently 23 ships were exchanged in 2003 as against 9 and 11 respectively for the two previous years. All sales were concentrated in ships built between 1980 and 1985 and Chinese buyers proved to be the most active. For example the OBO 'Pharos' 75,000 dwt built in 1983 was sold for $4.3 million in April and her sister ship 'Minoas' built 1981, thus 2 years older, achieved $5.5 million in November. 

The renewed interest in this type of ship has naturally put a damper on their demolition and whilst we saw 13 ships scrapped in 2002, there were only 5 which left the scene in 2003.

Europe, although lagging at the moment, will in time catch up with the more aggressive pace of the front-runners - China and the US, and participate as a matter of course in maintaining the crude oil production and the transport needs. Even Japan seems at last to have found the path to recovery. 

Some old ships still in service this year will disappear in 2004 (thanks to EU/IMO regulations) which will help to maintain a level of balance between supply and demand and to support prices. The marked absence of modern candidates up for sale which was felt at the end of 2003 will carry through for the first half of 2004 and this momentum will help keep values firm. The impossibility to obtain reasonable delivery dates from the shipyards will only help to accentuate this trend. 

To know when to sell is difficult, but 2004 could be a good time to be tempted, as it is clear that the market has already anticipated the renewal of necessary tonnage to fill the gap left by the latest restrictions and regulations. It is still the case and always has been that demand for tonnage is in fact the final barometer as to the ultimate value of these assets. Demand is currently strong and will remain so for at least the short term, but it would be presumptuous to try to predict further into the future. 

We would like to conclude in congratulating the French authorities who have caught up with their reprehensible delays in the domain of port inspections and who at the same time have decided to put heavier fines on illegal deballasting operations. There is still work to be done! We need to find a real answer to the problems of ports and places of refuge. This will require a certain courage and determination, but it is the price to be paid to avoid another pollution of importance, as much as with an old ship as with a modern one, as has already happened in the past.