With roughly $300m worth of firepower, top brass said the New York-listed product tanker operator has ample ammunition for more newbuilding orders.
“I have in my career never seen at this stage in the market the ability to get such significant returns on capital for newbuildings,” said Robert Bugbee, who claims to have seen returns as high as 30%.
The company identified the long-range-two (LR2) and handysize segments as potential targets, which is consistent with a bet that a broad-based market recovery may be on the horizon.
Management ruled out second-hand acquisitions and noted it has become increasingly difficult to find owners that are willing to relet LR2s, a trend that suggests the sector is starting to tighten.
Scorpio said it expects a surge in exports from the US Gulf to continue to drive demand going forward and believes prospects in the Far East and Australia look promising as well.
In the first quarter of this year, the company pointed out that many of the fixtures it has seen thus far have been linked to the Atlantic Basin, Mediterranean and Baltic.
When asked about efficiency and emerging technologies, management applauded the industry’s efforts to pursue LNG as an affordable source of power but said gas is unlikely to replace diesel as the tanker sector’s preferred fuel option anytime soon.
