Singapore shipowner Hafnia is forecasting new highs in the coming months for a resurgent product tanker market.
In its first-quarter report, the BW Group company said its average time charter equivalent earnings were $15,761 per day.
But it already has 70% of second-quarter days booked at $27,200.
And Hafnia said that in the last week it has averaged earnings of $32,646 per day for MR ships and $57,506 for LR1s.
Fearnley Securities said: “With rates remaining elevated and well above the guidance, we expect the full-quarter numbers to come in closer to the $30,000 mark.”
This should give Ebitda of $220m or higher, the Norwegian investment bank added.
Hafnia chief executive Mikael Skov said: “With a more restricted oil market and altering trading patterns increasing tonne-miles, we can only expect high product tankers rates to continue to new heights in the upcoming quarters.
“The product tanker market in the first quarter of 2022 continued to be challenged by supply constraints and volatile oil prices arising from the situation in Ukraine.
“This geopolitical climate has impacted trade patterns across the world, increasing demand and freight rates for product tankers from longer voyages to the Atlantic hemisphere.”
The company reported a $21.3m net profit for the first three months of 2022, against a $15.7m loss for the same period last year.
The performance was driven by quarterly TCE earnings of $163m, up from $100m in the first quarter of 2021 and $47.1m sequentially.
Leaning toward the positive
The outlook for the product tanker market for the rest of 2022 “leans towards the positive”, Hafnia said.
However, Opec’s struggles to meet production quotas, coupled with China’s zero-Covid policy-related lockdowns and the risk of decreasing world oil demand due to high inflation and a looming financial crisis are downside risks to the market, the company explained.
On the upside, record-low global product inventories, higher tonne-mile demand driven by diesel shortages, high refinery margins and growing demand for jet fuel from the pick-up in air travel are likely to keep product tanker utilisation and earnings supported for the rest of 2022, Hafnia believes.
“We will continue to focus on optimising synergies and earnings capabilities by utilising our well-positioned modern fleet to take advantage of the continued expected upturn in the product tanker market,” Skov said.