Ardmore Shipping chief executive Anthony Gurnee says oil traders are looking to increase timecharter coverage ahead of an expected turnaround in the clean tanker market.
The bullish call comes after Ardmore reported a full-year 2017 loss as spot rates for medium-range (MR) tanker "remained challenged," he said.
But the timecharter market has started off 2018 better. Clarksons shows one-year timecharter rates on MR2 tankers at $13,875 per day, up from $13,750 per day at the end of December. Three-year timecharter rates have ticked up $14,125 per day, up from $14,000 per day.
In response to a question about the uptick, Gurnee said "oil traders are taking on more tonnage and rebuilding their controlled fleets.
"They are doing it quietly, but doing it at higher levels than three months ago," Gurnee said, without mentioning any specific names. "That is clearly a strong signal."
According to market sources, Cargill, AET and Asahi Tanker are reportedly looking at MR2 coverage for periods up to three years.
ST Shipping is also reported to be looking for short-term coverage for MR2 and long-range 2 (LR2) coverage. Trafigura is said to be looking for LR2 coverage also.
As for when overall refined products trading would snap back from the current subdued levels, Gurnee says forward prices for gasoline and diesel would need to strengthen.
"You would see a lot more trading activity and a lot more product going into storage," Gurnee said.
Gurnee was also hopeful that the recent weakness in the spot market could reverse should demand for heating oil and gasoline pick up during the first quarter. Howe Robinson estimated that eco-design MR tankers were earning about $13,500 per day, down from a year-to-date level of $14,800 per day.
"Winter is not anywhere near over," Gurnee said.
