1/
$STNG's Robert Bugbee & Hafnia's CEO Skov had a wide-ranging #tankers discussion w/ @RivieraMaritime 10 days ago.
It's shockingly hard to find this video, which is probably why it only had 15 views when I found it.
@ClassicValueInv & @mintzmyer
$STNG's Robert Bugbee & Hafnia's CEO Skov had a wide-ranging #tankers discussion w/ @RivieraMaritime 10 days ago.
It's shockingly hard to find this video, which is probably why it only had 15 views when I found it.
@ClassicValueInv & @mintzmyer
2/ Summary Notes follow:
Aging fleet, limited new builds, recovering end-market demand, etc. Weak near-term. Tight supply.
Same core story #tankers has been batting about for 18 months.
Notes: believe scale requirements (and consolidation) for product tankers going forward...
Aging fleet, limited new builds, recovering end-market demand, etc. Weak near-term. Tight supply.
Same core story #tankers has been batting about for 18 months.
Notes: believe scale requirements (and consolidation) for product tankers going forward...
3/ are bigger than recent past (see recent $DSST and $ASC news as potential evidence).
4/ Consolidation has already been happening in product tanker market via two forms: M&A and Pooling.
A 3rd form is coming: Aging. Aging is a form of consolidation via market supply tightening. This leaves remaining players relatively larger.
A 3rd form is coming: Aging. Aging is a form of consolidation via market supply tightening. This leaves remaining players relatively larger.
5/
Q: NAV vs. stock price?
A: Mr. Market has more negative view on future than we do. Not a surprise that we fall in a "risk off" bucket: shipping is a "value" stock, plus volatile and historically risky. We can see NAV, but most outsiders can't. The positive of this massive...
Q: NAV vs. stock price?
A: Mr. Market has more negative view on future than we do. Not a surprise that we fall in a "risk off" bucket: shipping is a "value" stock, plus volatile and historically risky. We can see NAV, but most outsiders can't. The positive of this massive...
6/ ...discount is the capital markets will restrict and starve new build. In time, "the stocks will take care of themselves."
7/
Q: Scrubber retrofits vs. Scrapping?
A: Yes, we will see more retrofits. Obviously its a large-ship phenomenon.
Regarding scrapping: passing surveys is becoming more capital intensive, especially with aging fleets. Scrapping will become a more and more compelling choice.
Q: Scrubber retrofits vs. Scrapping?
A: Yes, we will see more retrofits. Obviously its a large-ship phenomenon.
Regarding scrapping: passing surveys is becoming more capital intensive, especially with aging fleets. Scrapping will become a more and more compelling choice.
8/
Q: what's the bullish argument for TCE rates, given floating storage draw-down impact?
A: In the very short term, Q3 is always weak and I expect that'll be true again this year. Q3 coincides with draw-down, which puts us in good position for Q4.
Pre-CV19's demand was a...
Q: what's the bullish argument for TCE rates, given floating storage draw-down impact?
A: In the very short term, Q3 is always weak and I expect that'll be true again this year. Q3 coincides with draw-down, which puts us in good position for Q4.
Pre-CV19's demand was a...
9/ ...very healthy product #tanker market.
The tightening ship supply means we will have a healthy market again soon. Likewise, if sanctions re-emerge (e.g., Venezuela), it could become surprisingly tight, surprisingly fast.
The tightening ship supply means we will have a healthy market again soon. Likewise, if sanctions re-emerge (e.g., Venezuela), it could become surprisingly tight, surprisingly fast.
10/
Q: Buying back shares vs. paying down debt?
A: $STNG - we've said we want lower net debt. For stock buybacks - we want to be playing from our front foot. We want to keep delevering for the moment, certainly through Q3.
Hafnia: TBD- "for sure" we will continue "discussing" it.
Q: Buying back shares vs. paying down debt?
A: $STNG - we've said we want lower net debt. For stock buybacks - we want to be playing from our front foot. We want to keep delevering for the moment, certainly through Q3.
Hafnia: TBD- "for sure" we will continue "discussing" it.
11/
Q: Digital modeling - will this have an impact in the future?
A: Yes - much better data analysis going forward. Better analysis based on better, faster access to data itself. Sensors, route and rate optimization.
Q: Digital modeling - will this have an impact in the future?
A: Yes - much better data analysis going forward. Better analysis based on better, faster access to data itself. Sensors, route and rate optimization.
12/
Q: IMO and environmental footprint?
A: Non-committal. It has costs and customers inherently have to pay part of that.
Q: When will peak oil occur?
A: "Some time in the future." It's not a binary event where one day to the next it changes. Will have a very long tail.
Q: IMO and environmental footprint?
A: Non-committal. It has costs and customers inherently have to pay part of that.
Q: When will peak oil occur?
A: "Some time in the future." It's not a binary event where one day to the next it changes. Will have a very long tail.
13/
Q: Trade-offs of spot vs. time charter?
A: Scaled, homogeneous fleets help create strategic relationships with customers, and drive increased utilization opportunities even in a spot approach.
Q: Suez and Afra pricing in 3-9 months?
A: Worse than product market!
Q: Trade-offs of spot vs. time charter?
A: Scaled, homogeneous fleets help create strategic relationships with customers, and drive increased utilization opportunities even in a spot approach.
Q: Suez and Afra pricing in 3-9 months?
A: Worse than product market!
14/
Covid: Very hard on seafarers. This is underappreciated.
-End-
Note: my notes are not chronologically organized.
Covid: Very hard on seafarers. This is underappreciated.
-End-
Note: my notes are not chronologically organized.
