SNL also said that scrubbers were only a short term solution for the largest vessels. Currently SNL has four scrubbers installed and that number might increase by 14.
In addition, SNL said that any recovery in the chemical tanker market would not happen until “later next year,” but warned that the rate improvement transfer into revenues should take even longer.
Norne Research said that as a result, its 2019 earnings estimates were significantly lowered, but long term predictions were being kept with small adjustments and its ‘hold’ recommendation remained.
During the third quarter of this year, bunker fuel prices continued to firm for SNL’s chemical tankers but were partially offset by bunker surcharges and hedging, while spot rates suffered, due to excess available tonnage.
Furthermore, the company changed its outlook on chemical tanker earnings, stating that they now expect the market to remain weak until the tonnage picture improves later next year, Norne said.
Due to the increasing length of the contracts, it takes time for the improved rates to be transferred into revenues, thus a more significant growth should be seen in 2020, SNL explained.