Tankers have recently experienced a strong recovery in the spot market, which tripled from just a few months back.
Namely, the tanker industry has suffered from deteriorating earnings, lower dividends and stock prices, but the headwinds seem to be over as shipping company Nordic American Tankers (NAT) reported that the spot market for the segment doubled from just 10 days ago.
NAT’s data shows that, at the start of the year, the company’s time charter rates (TCE) from West Africa, one of its main routes, were at USD 6,000 per day. These fell to USD 4,000 per day at the beginning of April, only to return to USD 6,000 per day in July.
In early October TCE rates jumped to USD 9,600 per day, and continued rising to reach USD 20,600 per day on October 10.
“This means a world of difference,” Herbjorn Hansson, NAT Chairman & CEO, said, adding that “if spot markets increase another 25% and stay there for 12 months, we could earn 25% of our market cap in a year.”
“Spot market earnings are volatile, but volatility is usually a sign of an improved underlying market balance and we have been firm believers in a market turnaround this year.”