A summer slump in freight futures has helped drag down shares in public shipowners during the past month, Credit Suisse says.
VLCC FFAs have declined by 15% over the period, while tanker stocks have fallen by 15% to 25%, analyst Greg Lewis says.
While VLCCs have averaged $40,000 per day in the first half of this year, futures point to spot rates at $30,000 daily during the second six months of 2016, he says.
The analyst says the 35% decline in the physical VLCC market and a one quarter fall in MR rates over the past few weeks are painful but not surprising.
“Using history as a guide August tends to be a good time to buy tanker stocks,” he said in a report today.
Given the present lows, Lewis says the “dog days of summer” have arrived ahead of usual.
However, the analyst says the sector’s orderbook is more manageable than people think.
“The orderbook stands at about 14% of the crude fleet, a far cry from the ~50% level back in 2008 but up from the 10% level in 2013,” he wrote in the report.
