The phone is ringing more and it's not shipyards on the line like earlier this year.
Tanker asset values are inching up with the VLCC market potentially set for a very bullish period from 2019 onwards, DHT Holdings executives say.New York-listed DHT Holdings yesterday reported a lower than expected third quarter loss in the worst tanker market since 2013.
Co-chief executive Trygve Munthe told investors on a conference call today: “The freight market has seasonally recovered and we expect our fourth quarter financials to be better than those in the third.
“Tanker values have stabilized this year and have recently started to inch upwards.
“We have experienced an increase in incoming calls [from people] wanting to buy quality ships across the age spectrum.”
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| Trygve Munthe: DHT Holdings co-chief executive at Nor-Shipping 2017 Photo: Fredrik Ekren |
'Not really a seller today"
DHT has a fleet of 26 VLCCs and two aframaxes on the water, with four more VLCCs under construction following a takeover of the BW Group VLCC fleet earlier this year.Its fleet includes a couple of 2001 built VLCCs, and a handful of other assets launched in the first four years of the century.
Co-chief executive Svein Moxnes Harfjeld says the company is not specifically looking to divest older assets but some could be sold if the right offer arrived.
“But we are not really sellers in this market in general; so there are calls coming in across the spectrum but in the modern segment we are not sellers at all at this time,” he added.
“As we are bullish in the medium term and think we have built up a very attractive fleet that will really be rewarded in times to come.”
Munthe told analysts the tanker market has received a “double punch combo” from the draw-down of stocks and a heavy newbuilding schedule.
However, this trend is expected to reverse in the coming years with an acceleration in the number of VLCCs reaching 20 expected to bring further relief.
“We think there is a lot of retirement that is going to happen in the medium term,” Munthe said. “When you look at the combination of these two then we are pretty positive for the tanker market.”
Yards busy elsewhere
Harfjeld also saw some positives on the newbuilding side, where yards are now marketing VLCC slots much less aggressively than in the early part of this year.“This is a combination of the fact people that were in the market for traditional fleet renewal have done most of the work they wanted to do. We also see that it seems to be challenging for several of the shipyards to issue refund guarantees at the contract prices people were willing to pay,” he said.
Greater activity in other asset classes is also lending a hand.
"There is orders for a big series of large containerships, for large iron ore carriers – there is a lot of activity in LNG," he said.
"So the yards are not as aggressive on tankers as they were in the first half.
“We think all of these things combined sets us up potentially for a very bullish period from 2019 onwards, potentially anyway.”
source: www.tradewinds.com