Tanker Shipping at Risk of Rare Winter Hibernation

Three months ago, tanker owners hoped for a quick rebound and talked up fleet expansion via consolidation. There’s little talk of fleet growth today. And a growing number of executives and analysts fear the typically strong winter season will be a bust.

Tanker stocks were up Monday on the Moderna vaccine news, just as they were a week before on the Pfizer vaccine news. Yet beyond such sentiment bumps — which Evercore ISI analyst Jon Chappell characterized as “likely a mix of short covering and bottom-feeding buying” — near-term tanker fundamentals are grim.

“These are tough times for [tanker] shipping,” said Diamond S Shipping (NYSE: DSSI) CEO Craig Stevenson during a call with analysts on Monday. “It’s in cash-burn mode. The next quarter or two are going to be tough. We’ll just have to gut it out.”

The winter that wasn’t?
“Weak Q4 conditions may confound some views that markets would see ‘normal’ seasonal gains, but 2020 is far from normal, and seasonal patterns can be discounted,” said Maritime Strategies International (MSI) in a new outlook released Monday,

“With renewed lockdowns being enforced across many countries in Europe in Q4, oil demand is going to take a further near-term hit,” warned MSI…

View entirety: Freightwaves