The below is an excerpt of an interview in Tradewinds, published May 9, 2019.
Written by Andy Pierce.
Odfjell believes the final piece of the chemical tanker market recovery puzzle has arrived to help drive an upturn in rates. While the Oslo-listed shipowner is not banking on the arrival of a new super-cycle, it is positioned for stronger markets and seeking to grow its fleet in a flexible way.
“The fundamentals for chemical tankers have been strong for quite a while. (...) The market has not really reflected how strong a demand picture we have seen. The piece of the puzzle that has been missing for us was the product tanker market.”
Kristian Mørch, CEO
Market transfers impact 'real supply'
He explains the company has been tracking the number of coated IMO II vessels trading in the chemical space against those trading dirty or in products. While last year saw many swing into chemicals, the trend began to reverse in the fourth quarter as tanker markers enjoyed a strong winter rally. Morch says the change has affected the real supply in the chemical space in a positive way at the same time as demand has been climbing.
He cautions the market has been stuck in a long downturn and is reluctant to commit to how high rates will go and how long. However, given the transport needs created by Odfjell’s customers producing more chemicals,
the company thinks there has been a fundamental balance shift.
“It’s probably not going to be a boom. We are not counting on that but we do see the trend is firming and we hope it continues. We are preparing for the opposite because we can’t see around corners. But if you look at the data, we can see that the markets are coming.”
Morch says 2018 was a record year for transactions, with 31 ships coming and going from the fleet as Odfjell continued to invest in tonnage at what it sees an attractive point in the cycle.
“We have done a significant amount of changes to our fleet and we are at a point now where we can say the base fleet is where we want it to be”.