"No Relief" on Bunker Prices as Odfjell Loss Widens

by Ship & Bunker News Team
Tuesday May 13, 2014

Norwegian tanker and storage company Odfjell SE said its loss widened to $23 million in the first quarter of 2014, compared with $13 million in the same period last year, despite a 4 percent increase in revenues to $266 million.

The company's largest division, chemical tankers, saw "no relief" on bunker prices, which averaged $565 per tonne over the quarter.

Odfjell anticipates global economic growth of 3 to 4 percent per year over the next few years, but it warns that the chemical tanker market needs to recover from "substantial market slack through slow-steaming and ballasting or part loading."

It also warns that new orders financed through the increased involvement of private equity in the market could dampen the recovery.

To address these potential hazards, Odfell has been reviewing "all aspects" of the business, including "reorganisation and alternative ownership models," as well as fuel efficiency issues, to find areas where it may be able to make itself more competitive.

Shipping companies have been expressing increasing concern in recent months about the potential for private equity firms to delay corrections to excess capacity.

Ship & Bunker News Team
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