Concordia Maritime is expecting a recovery for product tankers next year, after racking up a loss in what it called a weak market in the third quarter.
The Denmark-based company, controlled by the Stena group, posted a net loss of SEK 35.9m ($4.04m) to 30 September, against SEK 35.6m a year ago.
Total revenue dipped to SEK 210.7m from SEK 259.2m last year.
President Kim Ullman said: "After a very strong spring, driven by significant stock accumulation in response to record low oil prices, tanker rates fell sharply during summer and autumn, but we see conditions for a turnaround in 2021."
Ullman added limited fleet growth prospects look "really exciting" for the sector.
The orderbook for the product tanker segment is at a record low 6% of the total tanker fleet, the smallest figure in more than 25 years.
Including the expected phasing out of tonnage, growth in 2021 is expected to be only about 2% to 3%.
"Overall, this means that our view of market development in 2021 is extremely positive. However, this is all said with the greatest respect for the difficulty in making substantiated predictions in the current situation," Ullman said.
Ebitda was down at SEK 45.1m in the third quarter, versus SEK 52.4m in 2019.
Market beaten
Spot market earnings for the product fleet were $14,500 per day, higher than the average earnings of $9,100 for the wider market, Concordia said.
The sharp decline in rates from earlier in the year was attributable to lower oil consumption due to Covid-19, Opec's continuing production cuts and stock withdrawals close to the consuming countries, Ullman added.
Concordia had seven of 10 product vessels employed spot by the end of September. The company was also burdened by a loss of income due to scheduled drydockings.
In addition to the usual classification inspections, the shipowner is installing new ballast water management systems.
Two vessels went into drydock during the quarter and another seven will go in between now and summer 2021.
"The hangover after the extensive stock accumulation between March and May continues to linger and the market is likely to be challenging for the rest of the year," Ullmann added.
Since the lows in April, consumption has increased steadily and relatively sharply recently, he said.
Demand to return
Several institutions and analysts, including the US Energy Information Administration (EIA), expect consumption to be back at pre-Covid-19 levels as early as spring/summer 2021, ie around 100m barrels per day (bpd).
The level is around 95m bpd now, and the trend remains positive, Ullman said.
"The combination of increased oil consumption and continuing production cuts means that the stocks built up during spring are now gradually falling," he added.
"We expect them to be down to the five-year average as early as this coming winter. Overall, we expect that increased consumption of oil and normalised stock levels in 2021 will result in a clear increase in demand for tanker transports."
Concordia had available funds, including unused credit facilities, of SEK 438.5m at the end of the period.
