Nov 6 (Reuters) - A recovery in the product tanker market has begun and demand is likely to improve further next year, Scorpio Tankers Inc's Chief Operating Officer told Reuters.
Daily rates for transporting crude and refined petroleum products have been hammered as scores of tankers ordered before the downturn continue to hit shipping lanes amid tepid demand.
"We're very confident that the recovery (in the product tanker market) has begun ... We see pretty good signs that the demand for product tankers is growing next year," said Scorpio's Chief Operating Officer Cameron Mackey.
Monaco-based Scorpio, valued at $260 million, transports wet cargoes such as petroleum products, gasoline and vegetable oil.
"Even though the demand growth of gasoline or products say in the U.S. or Europe is flat, we still see very healthy demand growth in developing parts of the world like South America, Africa and South Asia," said Mackey, who has been with the company since 2009.
Average freight rates for medium-range product tankers spiked 77 percent in the past week to $17,000 per day, according to brokerage RS Platou Markets, recovering from a year low of $5,500 per day.
"The amazing volatility seen in the past week gives some confidence and is an indicator that the supply of ships and demand for ships is in balance," Mackey added.
Scorpio operates nine product tankers in the spot market and 11 on long-term contracts. The company has ordered for five new medium-range product tankers, which are expected to be delivered by 2015.
The company's shares, which have gained 25 percent this year, closed at $6.15 on Tuesday on the New York Stock Exchange.