Odfjell chief executive Kristian Morch is advising shipping players to look beyond negative headlines about coronavirus chaos and assess the facts.
Speaking with analysts in a conference call, the boss of the Oslo-listed chemical tanker owner said we would all be facing a "dark, dark future" if the media was to be believed.
"But if you try to switch off emotions and only look at the data, then at the moment we don't see any signs of a catastrophic impact on demand," he said.
"Of course it will have an impact, but a catastrophic scenario is not likely."
He pointed to busier ports in China following the easing of its lockdown, while he expects European and US port calls to pick up as restrictions are gradually eased there too.
"It's a good sign of how the wheels are turning," Morch said. "China is the key to many of the trades."
He said the oil price drop has improved margins for refiners and supported rates, adding that the low tanker orderbook gives scope for a quick recovery when markets normalise.
Contract renewals stronger
Contracts of affreightment (COA) rates have been rising, the company said.
"Last week, we renewed a big COA contract and that rate was up 7%," Morch said. "We have more than 100 COAs, some fronthaul, some backhaul, and we are competing with clean tankers in some regions. But, in general, the trend has been up and we are not seeing that reversing at the moment."
But he cautioned: "If there was ever a time to insert a disclaimer, I think this is probably the time.
"In my 30 years in shipping, I've never been looking at a picture that is as unclear as it is today. We are not so concerned about the virus, but more concerned about what comes after."
Earlier on Thursday, the company announced a reduced net loss of $4.4m for the first quarter as markets improved.
"Odfjell has been through a fairly rough period in the last couple of years," Morch said.
No distractions
But it got in early with cost reductions to turn its losses around.
"The crisis that we have had, this is helping us now," he said. "We have a lean platform with no distractions in terms of cost-cutting or fleet renewals."
But he added: "It's a time to be careful and not over-confident."
Asked about chopping time-chartered (TC) vessels from its fleet, Morch said: "We do have some flexibility to reduce our time-chartered fleet.
"We have been reducing TC costs quite a bit, but we do have ships expiring — and our general approach is unless it's a real bargain, we will redeliver the time-chartered ships that we have."
He said it is also important to note that the company is replacing chartered-in tonnage with pool vessels that it manages.
"There is no downside risk but we do get a fee for operating the ships — and, if we do well, we also have a profit share on top," Morch said. "It's not the same upside as a TC ship, but it's not far behind. It's a way of derisking."
