For shipowners, volatility has been a good thing.
At the TradeWinds Shipowners Forum at Nor-Shipping on Wednesday, owners across the industry said the recent increase in volatility in shipping markets was a positive — and in some cases there simply has not been enough.
“Volatility isn’t a bad thing, it creates opportunity,” said Nicole Mylona, chief executive at bulker owner Transmed Shipping.
She added that it has been 12 years since the dry bulk market saw real lows, which creates opportunities for the renewal of fleets.
“We haven’t had the shift to create a lot of opportunities in this market,” Mylona said.
“We are … seeing higher lows, which is a breath of fresh air, but I think we’ve lost a portion of what made dry bulk active and interesting with higher turnaround. It almost feels as though we’re on a good track again to a recovery without having had an opportunity to reinvest.”
Frontline chief executive Lars Barstad and DHT Holdings president and CEO Svein Moxnes Harfjeld said the higher lows have been seen in tanker trades, as well.
Barstad said the market bottoms out around $30,000 per day, which still provides good returns.
Harfjeld said tankers have always been volatile, but it was potentially scaring investors away.
The DHT chief executive said there could be a shift back to oil majors taking ships on long-term charter, rather than predominantly fixing ships in the spot market.
“Large tankers have always been volatile. It could be that things are shifting faster,” Harfjeld said. “I don’t mind frankly. It’s all about having a company with a robust capital structure.”
Volatility is often bad for smaller traders, Cool Company (Cool Co) chief executive Richard Tyrell said, but he added that the opportunities created by it are good for big players.
CoolCo has 12 LNG carriers in its fleet.
“A certain amount is great for business. It’s how all the big portfolio companies make all their money,” he said.
“If you’re a BP, Total, Shell, Cheniere, any of the big traders that have got portfolios, that’s what they like. The one thing they need to make the most of those opportunities is ships.”
