GasLog Ltd. (NYSE:GLOG) Q3 2019 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 08:30 am ET
Yes. [Operator Instructions]. Our first question comes from Michael Webber with Webber Research. You may proceed with your question.
Hey, good morning guys, how are you.
Hi, Mike. Good morning Mike.
Paul, I just wanted to, the first kind of touch on the spot market is we're ramping into Q4 and I kind of wanted to think about it, kind of in the context of, it's going to be just a year-on-year context. Last year, we saw a big ramp in storage early, a big seasonal draw, and then we had a hard landing in Q, the middle or back end of Q1, and it took the market a little while to recover from that. Just curious [Phonetic] as you see, the marketing, market developing into the back end of Q4, how would you compare what we're seeing this year to what you saw last year, just given where we're at from a storage perspective and its different market dynamics?
Yeah, I think certainly, if you look at the way the markets reacted this year, it has been following the trend of 2018 and yes there is storage. The storage, I think is quite interesting. I think the way that we people are looking at storage is not only vessels which are just sat there waiting to discharge somewhere off a port, but also vessels that are taking longer to reach their destination, and I think what we're seeing in this market is some storage, but some people doing what we've been talking about for a while, which is playing the arbitrage and saying, okay, where do we take these ships, what's the best place to put them. Let's put them if you like on a midpoint route between two areas. Well, we decide to go on less slow steam. So, there's a lot of that going on which is trying to maximize the arbitrage opportunities to maximize pricing on the vessels. So, I think some of it is out now storage, but I think some of it is just people trying to optimize their trading portfolio. The second thing I think that's happening is we are seeing now, and there was I think it has been slower than we would have liked, we are seeing this ramp up in new projects we talk now about Freeport and Cameron coming on stream, those projects coming on. So, I think there is an underlying drive of demand for ships in the market, which we hope will not lead to a fall-off in the rates that we saw last year, but the final thing I would say is that we have enough the ships, which we are trading in the spot market, you should always remember it's a small part of our fleet with the fully delivered big 35, we have seven at the moment...
but a number of those ships are due for dry-docking next year. So, what we've done is, we've looked to try to fix those ships through until