I am adding a third tranche of Scorpio Tankers (STNG) as its share price has continued to fall. Scorpio has made a lot of cash so far this year which is not being reflected in its share price. This company, along with most tanker stocks, seems to be trading on spot charter rates which have been dropping. Tankers are coming off charters for floating storage and the extra vessel supply is depressing charter rates. This situation will not last forever as there are only so many vessels contracted for floating storage. In the meantime, these low charter rates will not incentivize companies to build new vessels. Vessel supply will continue to decrease over time as the vessels age and are retired. Keeping older vessels in service is costly as they require more frequent surveys and maintenance. This trend will be good for tanker companies in the medium to long term. This remains a very attractive Speculation.
Bought tranche #3 @ 13.02.