New Odfjell chief executive Harald Fotland has pledged to continue fleet renewal, but is not seeing a great appetite at shipyards for chemical carrier contracts.
The Oslo-listed company still has 10 tankers dating from the 1990s in its fleet of 47 units, with another four built between 2000 and 2003.
Odfjell added six new vessels from Hudong Zhongua in China in 2019 and 2020, and bought five modern carriers from Peter Georgiopoulos’ Chemical Transport Group (CTG) in 2017.
“We do have some older ships,” Fotland told TradeWinds. “That’s the reason we ordered the six Hudong ships and bought the five CTG vessels.
“We have done fleet renewal and will continue to do fleet renewal,” the new CEO added.
“But right now I would say I fail to see yards out there that are motivated to take on the task to build stainless steel vessels in smaller series,” said Fotland, who takes over from Kristian Morch on Friday.
He explained that all the yard slots are filled up with LNG and container ships at the moment.
“That’s a more pleasant job, to build large series of standardised vessels rather than going into stainless steel projects,” the incoming boss added.
“We have plans and we will build, but we have to wait for the right timing to do that,” he said.
Asked about decarbonisation efforts, Fotland argued that much of the technology is commercially available already.
Market predictions futile
“Of course, there will be improvements in years to come,” Fotland added. “Engine manufacturers, they’ve come far when it comes to developing engines that can run on the future fuels.”
Turning to the improving rates for chemical ships, the COO said: “We are into a good market at the moment, that’s no secret.”
He put this down to more cargoes being available, the war in Ukraine changing the tonne-mile production pattern and many operators reducing speed due to high fuel costs.
Odfjell itself has reduced its capacity by 7% through slow-steaming.
“That has a lot to say when it comes to the total chemical fleet in the world,” Fotland said.
As to whether these improvements can continue this year and into 2023, the executive said this is “the million-dollar question.
“My theory is that the markets are unusually unpredictable, partly because of the international unrest that we see, but also recessions in some parts of the world, and increasing inflation," he added.
“So saying anything about how long the improving markets will last, that I would say is not possible,” Fotland concluded.