Tanker Upswing Continues, Says NAT
Bermuda-based international tanker company Nordic American Tanker (NAT) said that it has the strongest tanker market that it has seen in decades.
In NAT fleet of 23 suezmaxes, 21 are in the short term market, providing immediate benefit for nat. The fourth quarter is building a strong momentum for 2020.
"We expect this to continue. Political frictions often lead to a stronger tanker market," said the company.
About 70% of the spot trading days of our fleet for 4Q19 have been booked at an average TCE of $34,000/day. Spot rates are continuing its upward momentum.
The Time Charter equivalent (TCE) for our ships for the third quarter came in at $15,900/day, which was better than both the second quarter this year at $14,800/day and the third quarter last year that saw $12,000/day.
"Important structural changes stimulating demand for our suezmax tankers are taking place," it said.
New rules by the International Maritime Organization (IMO) coming into force on January 1, 2020 is one change. Oil exports from USA is another important factor. "We see increased crude oil volumes and longer sailing distances, creating more transportation work for our vessels," it said.
"Investors and lenders are reluctant to inject capital into private companies undertaking speculative ordering of ships –which is not part of a fleet renewal. This limits supply of ships, which is good for tanker owners and increases the attractiveness of NAT as a publicly listed company," the company noted.
Year-on-year the trend has continued with better earnings in 2019 versus 2018, confirming that the tide for the tanker market has definitely turned.