These Rates are Jaw Dropping

by | Apr 24, 2020 | General | 0 comments

Nat just released the tanker rates from last week and they are jaw dropping especially LR2 which is important for Scorpio Tankers.

https://www.nat.bm/wp-content/uploads/2020/04/Weeklyfreightrates20200424pdf.pdf

Scorpio’s break even is about $15k. For every $1,000 increase in rates, this translates into $45 million of incremental cash flow.

$175k – $15k = $160k

160 x $1,000 = $7.2 billion or $600 million every 30 days

The current market cap is $1.4 billion. At these rates, Scorpio is earning it in 60 days. This is unbelievable.

Disclosure: Long Scorpio Tankers

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About Mariusz Skonieczny

Mariusz Skonieczny is the founder of Classic Value Investors.