Stolt-Nielsen posts 2Q (March-May) figures next Thursday. There was a decline in chemical tanker rates, although the trend seems to be reversing during the period followed by weaker USD and the Israel-Iran conflict. Nevertheless, the uncertainty increases, while, with lower TP of NOK 320/sh, we keep Buy after a slight upward movement in the share price.
Weaker quarter guided and the rates confirmed this
Stolt-Nielsen guided a 2%-5% decline in the daily average TCE earnings for 2Q25, hence we took the midpoint as our estimate and saw the official chemical tanker rates moving in line with the trend. Similar EBIT QoQ is predicted by us, while the bottom line is projected to drop to around USD 60m.
Geopolitical tensions tighten market
The Israel–Iran conflict and subsequent U.S. strikes in June 2025 disrupted Middle Eastern shipping routes around Strait of Hormuz — a vital chokepoint through which about 20% of the world’s oil supply flows, triggering uncertainty and fear. This drove oil prices higher, leading to increased bunker costs and elevated TCE rates for a limited time, notably, the impact for chemical tankers was not as significant as for oil tankers. As of writing this, tensions in the region appear to be easing, although without a long-lasting resolution. Early breaches of the ceasefire between Israel and Iran underscored how fragile and uncertain geopolitical environment truly is. Nevertheless, oil prices had nearly returned to pre-conflict levels, whereas the sense of vulnerability in global shipping markets will persist. The incident may accelerate conversations around fleet resilience, energy security, and risk pricing in long-term charter contracts.
Trump-era uncertainty undermines dollar strength
In addition to the aforementioned geopolitical background, the US dollar’s status as a haven is being questioned due to policy uncertainty under the Trump administration and a deteriorating nation’s fiscal outlook in the years ahead. These drivers have contributed to the weakening of USD towards NOK, being one of the key reasons why the Target Price was reduced to NOK 320/sh from NOK 330/sh. Just a minor change leaves us with Buy recommendation for the stock.
Source: Stolt-Nielsen