Interesting development. I wish more details had been included in the note to shareholders. Now it leaves us to speculate what this means, who benefits, and what those benefits are.
The context was discussion of operating costs and how maintaining a homogeneous fleet maximizes operating efficiency. It sounds as if perhaps FRO is handing over management of their suezmax fleet to NAT, presumably in exchange for an operating fee. I would love to know the details but I guess we have to wait.
Turns out two more VLCCs which are even younger than those mentioned earlier are being scrapped:
"In the tanker market, rumors circulated in the market for two more double hull VLCCs, built 1996 and 1998, being sent for disposal by Japanese shipping giant Mitsui OSK Lines (MOL)."
Hellenic Shipping News
I don't know what sources he looks at, but there have been three VLCCs in the last month sold for scrap built in 1994 and 1995. The reason is quite simple. Scrap values are high enough that they compete with second hand values for selling vessels for further trading. A fifteen year old Suezmax on average would sell for around $20 million now. The scrap value for the vessel is about $13 million. This by itself is not reason to scrap, but there is something on the horizon that will make the decision to scrap or not more difficult for owners of mid-teen age tankers. That is the ballast water treatment rules. The system could cost up to $5 million for a Suezmax being retrofitted and most ships like NAT's will be required to have them in place by 2017.
So while they may not be "scrappable" at this point in time, they are FAST approaching that situation.
The Gemeni pool you halfwit - the one they got kicked out of. I'm not even sure why I'm responding to your fatuous post - it was so ignorant. To be fair though, it was one of your better posts.
Hey that's a good point (about competition).
I'm back in today at $11.95 for 40% of the shares I dumped for a loss at $18. I made some of it back trading the Oct move from ~$13-$15 but have been out of this stock since then. I think this is a good value under $12. Hopefully the rest of the market agrees.