Bermuda-headquartered Nordic American Tankers (NAT) said that its tanker segment is on upswing mode following he strong market improvement for its Suezmax tankers.
"However, seeing is believing and if anyone had doubts, last week, the international shipbroking firm of Clarkson Platou Research reported the largest week-on-week increase in the history of their freight index,"pointed out the company.
From Thursday to Friday last week, reported Suezmax rates jumped 60% on the day and 400% on the month, it said.
NAT’s uniform fleet of 23 Suezmax tankers have 21 units trading in the open spot market, ready to benefit from strengthening freights.
Presently the Suezmax spot market is reported to about $68,000/day, and rising. The NAT operating costs are about $8,000/day per ship.
A seasonal upturn was already in the making. However, the additional combination of increased demand from refineries around the world ramping up their production to supply low sulphur fuels for 2020 and reduced supply of new vessels are important structural factors.
The temporary uncertainty around the Saudi Arabian oil production has created additional demand pressure.
"The latest developments serve as important reminders of the volatility of the tanker market. The last three years were the exceptions, with most tanker companies experiencing consecutive quarters of below break-even earnings. As we have mentioned on several occasions, we believe this market bottomed out during 2018 and we will see further improvement going forward," it said.
"Our third quarter 2019 results will not be much different from our second quarter results. The upturn seen these last three weeks will filter through in our fourth quarter results. Our earnings as of September 30, 2019 will be released on Monday November 25, 2019, before NYSE opening," the tanker company noted.
In conclusion, NAT is in a very strong position with 21 of our 23 Suezmaxes in the spot market. We are able to benefit directly from this exceptional run up in Suezmax freight rates, it added.
"Going forward, we are excited about the prospects for the end of this year and further down the road," NAT said.