Following the dramatic plunge in oil prices, the tanker shipping market has benefitted from rising charter rates after a prolonged period of downturn since 2009. But the market has yet to shrug off the fundamental problem of an oversupply of tonnage.
“Higher freight rates are here to stay, though maybe not at the same levels as what we have seen in December 2014 and January 2015 but I definitely think it is an uptrend for crude shipping over the next 12-24 months,” Hanell told Seatrade Global.
He noted that tradings in both crude and clean petroleum products have grown quite a lot in the last couple of months due to the softer crude market, leading to an increase in tonne-mile and higher fleet utilisation.
The lower bunker prices triggered by the falling crude market have also made a huge positive impact on both the clean and dirty markets at the end of last year, leading to higher profit margins for shipowners.
The downside, however, is the recent new orders in the VLCC and suezmax sectors that raise fears of a downturn again, possibly two years later.
“There is a slight continuous growth in the market, there is also a lot of new orders coming in this year,” he said, adding that the rise in rates would be offset by the presence of excessive tonnage.
The check on new orders adding on to the supply, according to analysts, is an expectation that a significant number of existing tonnage could be employed in floating storage as a result of a widening contango in the oil markets, keeping tonnage supply under control and supporting spot rates.
Hanell also pointed out that another factor that could put pressure on the recovering market is when “everyone starts to speed up”. Charterers are now given a choice between savings on bunkers by slow steaming, or speeding up but saving money on a shorter charter time, given that spot charter rates for VLCCs, for instance, have climbed dramatically. Hanell said Stena Bulk, however, would stick to slow steaming amid the fragile recovery of the market.
“In general, both the VLCCs and suezmaxes on the crude side will get better in 2015; the MR and smaller chemical tankers will continue to have a tough time in 2015,” he commented.
Sweden’s Stena Bulk operates around 50-60 MR tankers, mostly under time-charter, in a joint venture Stena Weco and the company expects to expand the fleet to 60-70 by the end of this year. Its other major business is in the suezmax segment where it operates 20-25 ships under the joint Stena Sonangol pool.
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