A part of Watch Media

ShippingWatchMonday6 February 2023

  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Search
  • Log in
  • Latest
  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
11/12/2013at 14:14

Stena Bulk: No investments in 2014

Following massive investments in MR and Suezmax tankers, Swedish Stena Bulk will now take a break from investing. "It would be harmful if the general influx of MR orders continues," CEO Erik Hånell tells ShippingWatch.
BY OLE ANDERSEN

Erik Hånell, CEO of Swedish tanker carrier Stena Bulk and Stena Weco, which operates the company's product tankers in a joint venture with Danish Dannebrog in the Stena Weco pool, sees difficult and challenging market conditions for product tank as well as Suezmax in both 2014 and 2015.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

Erik Hånell says in an interview with ShippingWatch that the shipping company has no immediate plans to make further investments in the coming year. This goes for newbuildings as well as second-hand for the carrier, which in 2014 will take delivery of the first of ten Medium Range (MR) eco-design product tankers, at 50,000 teu each, from Chinese Guangzhou Shipyard.

Investment break

The break in investments follows Stena Bulk's massive investments in 2012 and 2013, which in addition to MR also include a series of seven Suezmax vessels from Korean Samsung Heavy Industries. The latter is part of the partnership with Angola's state oil company, Sonangol, in the Stena Sonangol Suezmax Pool, which currently controls 30 fuel efficient crude oil tankers with an average age of just three years.

Photo: Stena Bulk
Photo: Stena Bulk

Stena Bulk's investments were made in order to take advantage of the low shipyard prices in both segments. The shipping company, which is headquartered in Gothenburg, is said to have paid around USD 40 million a piece for the MR vessels and USD 75 million for each of the seven Suezmax vessels.

"For Suezmax we've probably seen the worst market in many years. There has been a small improvement recently, but we are still waiting to see if it will last. The fundamental market conditions right now don't really allow for investments in newbuildings in this segment, while on the other hand, there are some solid investments to be made in second-hand. I would never order Suezmax ships in a market like this," says Erik Hånell, who also denies speculations that Stena Bulk is currently harboring plans to return to the VLCC market:

"If there's money to be made by investing in VLCC, then of course one shouldn't deny it completely, but a situation like that is very far from the current reality. And our core businesses are MR and Suezmaxes."

Navigator-trained Erik Hånell became CEO of Stena Bulk in late 2012, replacing the company's CEO through many years, Ulf Ryder.

Stena Bulk's total fleet currently includes around 100 tankers, primarily MR and Suezmax, though also a few Panamax, Aframax, and three LNG ships. Approximately one third of the fleet is owned by the carrier. Between 40 and 45 product tankers participate in the Stena Weco pool, and as Stena Bulk says it, the ten new MR vessels mean that the company becomes truly global.

Worried about 2015

In the next two years the market will see a serious influx of new product tankers, owned by new players, especially in MR, a development that could lead to challenges, says Erik Hånell:

"Stena Bulk and Stena Weco had a solid 2013, and we expect something along the same lines for 2014, before the many newbuildings are delivered. I'm a little worried about 2015, which will depend on how the global economy develops. If the current situation continues, with such a high level of MR newbuilding orders as seen in 2013, it will of course be harmful to the market. It almost can't get any worse for Suezmax and the crude oil market than what we've seen in 2013, even though there's been a slight improvement recently," says Erik Hånell, who also sees challenges related to the new owerships in product tank:

Equity funds and partners

"We've seen many new investors (equity funds) in the MR segment, and these investors are of course trying to find good partners backed by the right names, which will probably be challenging to many of these companies. That's why it's important to be specialized and have special businesses, like we feel we do with Stena Weco, with a strong operating platform. Everyone can do it in a strong market, but a poor market is where you can actually make a real difference. We've achieved good results with Stena Weco, and at least we're making our owners happy," says Erik Hånell.

"Right now we're quite pleased with the ships we've ordered. Depending on the opportunities that come along, we might consider second-hand ships, though prices are increasing here as well, so we're not looking at anything immediate. As such, our investments are probably settled for at least the next year or so."

Stena Bulk in Korean collaboration on Arctic sailing

And as for the ongoing discussion about eco-design ships versus older standard ships, Erik Hånell says that the bigger the eco-design ships are, the more sense it makes to invest in them.

"The benefits of course depend on time spent in ports, and on how much is subtracted by ballast. But there's no doubt that for Suezmax, with which we have experience, there's a significant difference between eco-design ships and standard non-eco ships ordered around the same time. We're looking at a difference of at least USD 3,000-4,000 a day for a Suezmax, while the gain for an MR eco-design versus a standard ship would be somewhat less. But the new eco-designs will definitely also make a difference in the MR segment."

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

Tanker: Record year for Suezmax spot rates 

Golden Stena Weco: We'll double our fleet

Weco Group establishing bulker company 

Related articles:

  • Tanker: Record year for Suezmax spot rates

    For subscribers

  • Photo: Pressefoto

    Golden Stena Weco: We'll double our fleet

    For subscribers

  • Weco Group establishing bulker company

    For subscribers

Sign up for our newsletter

Stay ahead of development by receiving our newsletter on the latest sector knowledge.

!
Newsletter terms

Front page now

Palle Laursen has spent almost his entire career at Maersk where he began as a maritime engineer in 1998. He now retires as chief of fleet. | Foto: Maersk
Container

Maersk's chief of fleet leaves after 25 years as reshuffling continues

Palle Laursen leaves Maersk after 25 years in the company. Another leader is also out the door, as Vincent Clerc continues to put his stamp on the shipping giant.
  • Vincent Clerc sets brand new executive team
  • New executive team to steer Maersk through recession: "A lot of highly experienced industry people"

For subscribers

Lars Jensen is a shipping analyst and founder of consultancy Vespucci Maritime. In the future, he will write two opinion pieces for ShippingWatch a month. | Foto: Magnus Møller
Container

Opinion: Maersk and MSC heading for direct confrontation over customers

For subscribers

Foto: Uncredited/AP/Ritzau Scanpix
Tanker

New Russia sanctions could eventually leave Europe in drastic need of diesel

For subscribers

"Vi har nogle gange haft ry for at have et kortere aftræk end vores konkurrenter. Du kan godt regne med, at det ry vil vi gerne holde fast i," siger Jens Lund, driftsdirektør i DSV. | Foto: DSV
Logistics

DSV denies savings plan but is attentive to costs

For subscribers

Foto: PR / Euronav
Tanker

Euronav CEO defends decision to retain large dividend

For subscribers

Photo: Mike Blake/REUTERS / X00030
Container

Freight rates out of China continue to plummet

Further reading

Foto: Uncredited/AP/Ritzau Scanpix
Tanker

New Russia sanctions could eventually leave Europe in drastic need of diesel

It will be difficult to replace the existing supply of Russian oil products when new EU sanctions come into force on Sunday, according to one broker. Hafnia predicts a strong market.

For subscribers

Lars Jensen is a shipping analyst and founder of consultancy Vespucci Maritime. In the future, he will write two opinion pieces for ShippingWatch a month. | Foto: Magnus Møller
Container

Opinion: Maersk and MSC heading for direct confrontation over customers

Ahead of the 2M alliance’s final termination in 2025, Maersk and MSC will probably try to steal customers from each other, writes analyst Lars Jensen.

For subscribers

Foto: Staff/Reuters/Ritzau Scanpix
Logistics

DSV sees one advantage of downturn: It will be cheaper to buy competitors

Acquisitions are decisive for growth at logistics group DSV, and with prospects of declining freight volumes, the prices of acquisitions will fall. DSV will use this to its advantage, according to CEO Jens Bjørn Andersen.

For subscribers

Latest news

  • Freight rates out of China continue to plummet – 3 Feb
  • Ziton wins multi-year deal with German utility – 3 Feb
  • Euronav CEO defends decision to retain large dividend – 3 Feb
  • DSV denies savings plan but is attentive to costs – 3 Feb
  • DP World to construct large port terminal in India – 3 Feb
  • Maersk's chief of fleet leaves after 25 years as reshuffling continues – 3 Feb
  • Clarksons banks on offshore wind with new US office – 3 Feb
  • Opinion: Maersk and MSC heading for direct confrontation over customers – 3 Feb
  • Bulgaria to keep up export flows of Russian fuels to Ukraine – 3 Feb
  • New Russia sanctions could eventually leave Europe in drastic need of diesel – 3 Feb
See all

Jobs

  • Fleet Manager

  • Chartering Manager for Lauritzen Bulkers A/S

  • Senior Lead, Human Sustainability at Sea

  • Foundation Package Manager - Offshore wind industry

  • Senior Financial Controller

  • Ambitious employee for Shipping office wanted

  • Copenhagen Shipping Company is hiring a skilled cargo broker

Jobs

  • Fleet Manager

  • Chartering Manager for Lauritzen Bulkers A/S

  • Senior Lead, Human Sustainability at Sea

  • Foundation Package Manager - Offshore wind industry

  • Senior Financial Controller

  • Ambitious employee for Shipping office wanted

  • Copenhagen Shipping Company is hiring a skilled cargo broker

See all jobs

Colophon

ShippingWatch
Search

Sections

  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
  • Sitemap
  • RSS feeds

Editor

Tomas Kristiansen

tk@shippingwatch.dk

Tel.: +45 3330 8360

Editor-in-chief

Anders Heering

Publisher

JP/Politiken Media Group Ltd

Advertising

annoncering@infowatch.dk

Tel.: +45 7077 7445

Advertising

Job Advertising

job@infowatch.dk

Tel.: +45 7077 7445

Jobs

Subscription

Try ShippingWatch or get an offer for a subscription meeting the exact needs of you or your company.

shippingwatch@infowatch.dk

Tel.: +45 7077 7445

Learn more about subscriptions here

Address

ShippingWatch

Rådhuspladsen 37

1785 Copenhagen K, Denmark

Tel.: +45 3330 8360

Guidelines

  • Privacy Policy

Copyright © ShippingWatch — All rights reserved

Microsoft is in the process of discontinuing Internet Explorer – and so are we.
For a better experience, we recommend using one of the following browsers.

Kind regards,
ShippingWatch

Google ChromeMozilla FirefoxMicrosoft Edge