US-listed Nordic American Tankers (NAT) has a simple message about its suezmaxes: “The market is good for our ships.”
The Herbjorn Hansson-led shipowner said in a statement on its website that in shipping there are many opinions about demand.
“But the size of the current fleet and the orderbook for new ships are not in dispute. These are facts,” the company said.
NAT believes current tanker dynamics make it obvious the tonnage balance is in the owners’ favour.
Despite a traditionally low season and Opec cuts, the owner said time charter equivalent earnings for the third quarter have been 50% ahead of the average for the past 10 years.
The company also pointed to an orderbook so low that it is still breaking 20 and 30-year-old records.
Vessels on order account for 9% of the existing world suezmax fleet, even after a recent contracting surge.
But NAT said the lead time is more important, with deliveries spread over the next four years.
There is only one new suezmax still to join the world’s fleet this year, and just six over the whole of 2024.
Hard to see an order rush
“With the cost of capital increasing by the day and clouded visibility, it is difficult to envisage a rush of orders for delivery four and a half years out in time,” NAT said.
“This just goes to prove the lesson from tanker economics: the supply of tankers is inelastic in the short term. But this time it looks like short-term is here for longer.
“This should continue to keep the tonnage balance in our favour for several years to come.”
NAT reported a quarterly profit of $26.8m for the three months ending 30 June, a dip from the first quarter’s $46.9m that still reversed the $3.95m loss logged in the second quarter of last year.
The profit was driven by net voyage revenue of $67.9m, which nearly doubled the $34.8m earned in the second quarter of 2022.
At the end of August, TCE rates were $34,800 per day in the third quarter, with 57% of fleet days booked.
In the full third quarter of 2022, NAT reported a TCE rate of $27,850 per day per ship.