Nov 6 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
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
The company's shares, which have gained 25 percent this
year, closed at $6.15 on Tuesday on the New York Stock Exchange.