STENA BULK'S CEO ERIK HÅNELL
REFLECTS BACKWARDS AND FORWARDS
2018 was a lost year. The first three quarters were actually the worst since the 80s, though we saw improvement in the fourth quarter. This was probably the first sign that we are now heading towards a more favourable market.
In 2018, we invested considerably despite the circumstances in order to position ourselves in the market to renovate our time charter fleet. From the second to the fourth quarter, we signed contracts for six vessels in the Suezmax* size class and now another one this January. From a low of 18 vessels in the Sonangol-pool where these ships operate, we are now once again up to about twenty-five, and there is room for more.
Another commitment made last year was the establishment of a new joint venture, GSB Tankers, together with Japanese Bay Crest Management, for expansion in Asia. GSB Tankers, which will manage operations and the commercial service of medium-sized chemical tanker, started their collaboration 1 January 2019 from the Golden-Agri Stena** premises. In addition to the head office in Singapore, GSB Tankers will have offices in both Dubai and Tokyo. Initially, eighteen chemical tankers will operate, but the goal is thirty ships within the next year.
If we instead look at some general factors going forward – international circumstances that affect us, such as the crisis of sanctions against Venezuela as well as against Iran, the continued unrest in Libya, OPEC cutbacks in production and America’s increased production – these are factors that have both positive and negative impact, but on the whole and in the long run starting summer 2019, the majority of scenarios we’re looking at indicate a sharp rise in the market.
Further positive factors that we take into account in our predictions are renovations to install scrubbers, which are the result of stricter global sulphur directives from the IMO. This will probably mean a logistical challenge for oil transportation in general – which is good for us – and which of course also has an impact on the market. Last year was a record year for the phasing out of older tankers, which was partly offset by increased access in the beginning of the year.
Looking ahead from a broader perspective, 2019 and especially 2020 look to be promising and although there are many factors that can influence developments in an undesirable direction, we remain cautiously optimistic. Whichever way you look at it, there is no doubt that these will be some exciting years to come!
Erik Hånell, CEO, Stena Bulk
* 10,000-25,000 dwt, ** Since 2012, Golden-Agri Stena has been a joint venture between Stena Bulk and Golden Agri-Resources.
