MISC joins peers warning of weak 2H for tankers

Malaysian ship owner MISC Berhad joined a number of other tanker market participants in warning that dirty tanker spot freight rates will be under pressure for the rest of this year.

The company logged higher profits from its petroleum tanker arm in the second quarter, after the spot market rate surged during the period. But rates have since fallen and MISC said that they are likely to remain suppressed for the rest of the year, with the global economic recovery forecast to "take some time" and a large oil inventory overhang expected to delay recovery.

The shipowner is one of several market participants that have warned in second quarter results about freight rates possibly remaining under pressure for the rest of 2020, including Euronav, Scorpio and shipbroker Clarksons.

MISC's tanker business made an operating profit of 201.8mn ringitt ($48.1mn) in the second quarter, up from 33.1mn ringgit in the corresponding quarter of 2019. It said this was because of the spot-market surge in March and April, when there was a sudden increase in crude supply after the Opec+ deal collapsed. But rates have since plunged, with lower demand for tonnage on the back of new Opec-led production cuts and US shale output shut-ins.

As of today, MISC's fleet consisted of 13 very large crude carriers (VLCC), six Suezmaxes, 32 Aframaxes, five Long Range 2 (LR2), one Medium Range (MR), one Panamax, four chemical tankers, eight dynamic positioning shuttle tankers (DPST), nine logistic support vessels (LSV) and 29 LNG carriers. MISC said it is focused on expanding its shuttle tanker business and rejuvenating its VLCC fleet with LNG dual fuel systems.

By Nikos Kokolinakis