Ardmore Shipping chief executive Anthony Gurnee expects the medium-range products tanker market to return to strength by the final quarter of the year.
The executive told analysts today that demand fundamentals remain strong for the New York-listed products and chemical tanker owner's key sector.
He said MR demand growth is poised to exceed supply growth significantly this year. And while Gurnee said the high level of products inventories is still the key factor weighing on charter rates, which dragged the company into the red, de-stocking is well under way.
Those factors "should set the stage for a charter market rebound in the fourth quarter or perhaps even earlier," he said after the company reported a smaller-than-expected first quarter loss.
Gurnee told analysts that there were several bright spots in the products tanker market, such as high demand in Latin America for US Gulf exports. Plus, there has been increased importing activity in West Africa for European and US products cargoes.
This, he said, is "providing evidence that the supply-demand balance is already quite tight".
"Looking ahead, the outlook is positive. Underlying demand growth remains robust in the 4% to 5% range, underpinned by 1.3 million barrels per day of oil consumption growth, as well as a long-term trend of ongoing refinery development away from points of consumption and ever increasing trade complexity which results in long-duration voyage," Gurnee said.
And he added that supply growth is decelerating and is already at historical lows.
Gurnee is not alone in predicting that a rebound is ahead for the products tanker sector.
"We continue to be very constructive on a recovery in product tankers towards the end of this year, as a dramatic decline in fleet growth takes effect, which should give the sector significant optionality to sustained or unforeseen product demand growth," said JP Morgan analyst Noah Parquette.
The analyst said he expects the market to "firm significantly" next year.
