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Eitzen Chemical fleet value halved

Eitzen Chemical fleet value halved
Eitzen Chemical has seen the net value of its fleet fall by half since the peak in 2008.

Eitzen Chemical fleet value halved.

Eitzen Chemical has seen the net value of its fleet fall by half since the peak in 2008.

The Norwegian chemical tanker group, which owns 62 of the 81 vessels it operates said the fleet is valued at only $200m.

However, chief executive Terje Askvig said that certain segments, such as the stainless steel chemical carriers and medium-range product tankers, were stabilising in price due to recent activity in the sale and purchase markets.

Eitzen Chemical, which is a division of the Camillo Eitzen Group, struggled through the final quarter of 2009, reporting a net loss of $33.9m, in what Mr Terje said was the bottom of a ?very bad market?, with 2010 being a more normal bad market.

In December, Eitzen Chemical raised $130m through a share issue and also struck deals with its banks and bondholders to delay payments for at least two years. This had given the company a financial bridge as it awaits the markets to return, Mr Askvig said.

There had been signs of improvements in some of the company"s trades, Mr Askvig said. More acids had been shipped from Morocco, and more palm oil from Malaysia and Indonesia to India. Middle East trades had been more active, and biodiesel was beginning to pick up after an extremely slow 2009.

While demand was likely to increase slowly, Mr Askvig said the supply side in the chemical tanker market could improve more quickly. The orderbook in the 60,000 dwt sector currently stands at 20% of the total fleet, down from the high of 50% last year. He added that with some Asian yards experiencing difficulties, a number of the vessels on order could still be cancelled or delayed.

The ban on single-hull tankers was having an impact on scrapping levels. Around 2.2m dwt was removed from the 60,000 dwt chemical market last year, and nearly 500,000 dwt had been removed already this year.

Eitzen Chemical has decided to put the 1993-built Siteam Actinia into lay-up rather than put it though a scheduled drydock. The 40,000 dwt vessel is not double-hulled and would not command a sufficient charter price. Operating costs would not be lower than the $2,000 a day of the vessel being idle.

For the full year 2009 Eitzen Chemical reported gross profit of $235.7 m and a corresponding net loss of $98.6m, compared to a net loss in 2008 of $345.7m.


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