Scorpio Tankers(US:STNG)2021-08-05 19:34Financial Data and Key Metrics Changes - The company reported a continued market weakness due to the pandemic, but believes the recovery has been deferred rather than canceled [9][10] - The value of the company's fleet has increased, with vessel prices rising and low supply growth [10][14] - The company has maintained a strong liquidity position, with $282 million as of June 30 and $268 million as of the current date, up from $187 million at the end of the previous year [79][80] Business Line Data and Key Metrics Changes - The product tanker market has seen a recovery in demand, particularly in the Americas, with refinery utilization reaching 92% in June and July, the highest since the onset of COVID-19 [21][22] - The company has noted an increase in arbitrage barrels moving longer-haul, which has positively impacted rates recently [20][66] Market Data and Key Metrics Changes - The company observed a significant draw in global inventories and rising demand, with global commercial flights at 89% of 2019 levels, but jet fuel demand still lagging at 70% [22][23] - The tanker market is expected to recover in the second half of the year, with a focus on the latter part of the second half for a meaningful upswing in rates [24][75] Company Strategy and Development Direction - The company is focusing on sensible balance sheet management and liquidity management ahead of the anticipated upswing in rates [10][14] - The company is exploring investments in dual-fuel technology, specifically methanol, to enhance competitiveness in the long term [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the tanker market, citing constrained supply and increasing asset values as positive indicators [14][17] - Concerns over COVID-19 variants continue to impact the global market, but management remains optimistic about the eventual recovery [11][12] Other Important Information - The company has upsized its 2025 convertible bond and is actively managing liquidity to ensure business stability [10][13] - The company is experiencing a benign vessel supply outlook, with historically low product tanker order books and constrained shipyard capacity [23] Q&A Session Summary Question: Investment in Dual Fuel Tankers - The company made a small investment in dual-fuel tankers to engage in the benefits of dual-fuel technology and position itself competitively for the future [29][30] Question: Vessel Age and Fleet Renewal - Management indicated that vessels under 15 years are treated similarly, and the company does not feel immediate pressure for fleet renewal due to the technological advantages of its ECO design vessels [36][38] Question: Capital Commitments and Liquidity - The company is confident in its ability to handle capital commitments, with plans to refinance some of the debt coming due [41][43] Question: Scrubber Installations - The company is reducing the number of scrubber installations going forward, with a focus on efficiency and minimizing off-hire days [47][74] Question: Current Rate Environment - The company is currently booking voyages at higher TCEs compared to previous averages, with expectations for a more meaningful recovery in Q4 [76][77] Question: Refinery Closures and Market Impact - Management noted that refinery closures are leading to increased ton miles and positively impacting the market dynamics [97][98]