Pyxis Tankers Inc. (PXS) stock prices were down by 12.71% shortly after market trading commenced on August 9th 2021, bringing the price per share down to USD$0.71 early on in the trading day.
Markets Affected by Pandemic
The second quarter of fiscal 2021 saw the chartering environment for product tankers continuing to be depressed, particularly in the spot market in the Eastern hemisphere. While the period market was more stable than the spot market, it did exhibit a decline in activity over the quarter that fell below the previous 10 year averages. The employment strategy for PXS stock’s Medium Range tankers of shorter-term, staggered time charters has proven to be effective in keeping the company comfortable during a particularly tough market.
PXS Stock Suffering
The second quarter of 2021 saw PXS stock report an average TCE for its Medium Range tankers in the amount of almost USD$12,700 per day, which is roughly USD$2,165 per day less than the numbers reported in the prior year quarter. As of August 4th 2021, the company reported having booked 47% of all available days for the third quarter of fiscal 2021. Thus far, the average TCE rate has been set at approximately USD$10,920 for the MRs.
Light at the End of the Tunnel
With increased global demand, especially from OECD economies coming out of Covid-19 lockdowns, for refined petroleum products, PXS stock has reported a reduction in global inventories to levels in line with prior 5-year averages. The company expects increased refinery utilization moving forward, as well as increased transportation activities, both of which are positive signs.
Favorable Market Conditions Predicted
Nevertheless, the company has reported a transitioning of a significant number of long-range tankers from dirty/crude trades which are currently depressed, to clean products, thus adding capacity and negatively impacting charter rates. The movement is thought to be temporary as the IEA forecasts global oil demand to increase by 4.6 million barrels per day in H2 2021, and by another 3 million barrels in 2022.
Future Outlook for PXS Stock
With the company anticipating the return of the global economy to pre-pandemic levels, PXS stock is poised to capitalize on the success of its strategies to stay afloat during the pandemic. The company is keen to continue its trajectory of growth at an unprecedented level once the effects of the ongoing coronavirus crisis are mitigated sufficiently. Investors are hopeful that the world’s ongoing efforts towards universal immunizations will accelerate the economic landscape, thus ushering in significant and sustained increases in shareholder value in a timely manner.
