Product tanker rates’ progress is so strong that the sector stands for shipping’s biggest leap this year, according to Clarksons Platou. Progress confirms carrier Norden’s heightened expectations.
While spot rates on the container market continue their slow decline since the year’s start, and the dry bulk market is stable, product tanker is currently behind the most significant progress.
According to an update by analyst firm Clarksons Platou, product tanker is so far shipping’s big winner this year.
”Cash flows are now so strong for product tanker companies that return of capital is back on the agenda, mainly in the form of stock repurchases,” writes Clarksons Platou in the update.
Accordingly, optimism in the sector, which for long has been under pressure due to a weak market, can be felt.
Recently, carrier Norden upgraded its expectations for 2022.
Norden expects a full-year result of USD 270-350m against a previous guidance of USD 210-280m.
According to the company, the upward adjustment was due to ”significant increases in product tanker market rates.”
”Combined with lengthening voyage distances, the products sector looks primed to gain further, we argue,” writes Clarksons, which, among other things, refers to shares having increased by 15 percent in financially strained Scorpio Tankers due to increased earnings in the first quarter.
On average, product tanker shares have increased by 9 percent, according to Clarksons Platou, which furthermore refers to shipping tycoon John Fredriksen’s purchase of shares in International Seaways.
Fredriksen’s purchase can be viewed as a sign of further sector consolidation.
