Nordic American sees tanker market improving
There is continuing upward momentum in spot trading rates in the tanker market, according to Bermudian-based Nordic American Tankers.
In addition, new rules by the International Maritime Organisation that come into force in January, and oil exports from the US, are factors that will stimulate demand for Suezmax tankers, the company said.
“We see increased crude oil volumes and longer sailing distances creating more transportation work for our vessels,” Nordic American Tankers said in a statement.
It reported a third-quarter loss of $13.7 million, or ten cents per share, which missed the eight cents per share loss expected by Yahoo Finance analysts.
However, the third quarter improved on the previous quarter’s $14.9 million loss, and the $37.9 million loss for the same period last year.
“We currently have the strongest tanker market that we have seen in decades. In our fleet of 23 Suezmaxes, 21 are in the short-term market, providing immediate benefit for NAT,” the company said.
“The fourth quarter is building a strong momentum for 2020. We expect this to continue. Political frictions often lead to a stronger tanker market.”
The company said the improved earnings, year on year, confirmed “that the tide for the tanker market has definitely turned”.
Nordic American Tankers said about 70 per cent of the spot trading days for its fleet for the fourth quarter have been booked at an average time charter equivalent of $34,000 per day.
For comparison, during the third quarter the time charter equivalent was $15,900 per day, which was up from $14,800 in the second quarter, and $12,000 for the third quarter of 2018.
Nordic American Tanker’s fleet is financed through a $306 million, five-year senior secured credit agreement with CLMC Corp, funded by Beal Bank of Dallas, and Ocean Yield financing for three vessels delivered last year.
Commenting on the world economy and the tanker market, the company said: “What is good for the world economy and world trade is by nature positive for the crude oil tanker business.
“It is important to note, in light of trade war headlines currently, that political uncertainty can be positive for tanker shipping, as inefficiencies in the energy logistical chain stretch the tanker fleet (storage, delays, different trade patterns, etc) and subsequently limits supply of tankers.”
The company has declared a two cents per share dividend for the third-quarter, to be paid next month. It is the 89th consecutive dividend distribution by Nordic American Tankers.
• Disclosure: the writer of this article owns shares in Nordic American Tankers
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