Concordia Maritime chief executive Kim Ullman believes the lower product tanker orderbook will protect owners from lower demand when stored oil starts to be moved off ships and out of tank terminals.

Speaking on a conference call with analysts, the Sweden-based boss said the storage boom was the main reason for "hot" rates during the coronavirus pandemic.

"I mean, corona is not a good thing for us. It's a bad thing. But in the meantime, when people are overproducing and flooding the market with oil, then it's good tanker days."

With production coming down and consumer demand potentially rising again, there will be a time, perhaps during the summer or fall, when the consumption will surpass production and spur inventory drawdowns, he said.

"And that draw from inventories is normally not good for tanker business because the consumers can pick up their oil from shorter distances or from land storage, basically," Ullman said.

Downturn dampened?

But he believes it quite likely that a downturn may be dampened due to the sheer number of ships taken out of the market for floating storage and the logistics challenge of imports.

"We've seen lots of that right now, and ships are being taken for six months, and potentially longer as well for global storage. And that is keeping, certainly, a number of ships out of [the] investment market this autumn to come," he said.

And Ullman said the newbuilding orderbook is another insulating factor.

"One thing that is for sure, [the] orderbook is low. New orders are basically not coming in at all. So the fleet is shrinking in all of this, which is good, of course, and it's also a counter-measure towards this period when you draw from stocks," he said.

"So we're coming in the right direction there. And nobody can really destroy 2021 by ordering ships right now. So that's a clear statement."

Time charters attractive

Ullman said the company is open to increasing time charter coverage for its P-Max product fleet, particularly if markets are looking worse in the second half of the year.

"Yes, we should take the opportunities to fix at these high levels that are currently out there. Not many, but there are a few," he added.

Concordia plans to roll over existing bank finance this year.

It also faces maturity in 2021 of about $20m.

"That's actually for two of the P-Maxes. So what we're planning on to do is to refinance these two during this year, actually during the second half of this year," chief financial officer Ola Helgesson said.

"So we have at least one year ahead of maturity for that facility."

Ullman added that the company "likes" its banks, which are providing competitive terms.

Stena-controlled Concordia said on Wednesday it had postponed plans to shift its listing from Stockholm to Oslo due to the outbreak.

Net earnings in the first quarter rose to SEK 29m ($2.88m), from SEK 1.7m in 2019, in strong markets.

Revenue grew to SEK 348.6m, against SEK 310.7m.