I have never understood the basis for these chartering-in transactions. One would assume that the ship owner could always charter the ship at the going rate to someone in need of shipping. So, the owner is presumably not giving STNG a below market deal. No sense in that. Therefor, STNG seems to be betting that charter rates are going to be moving up, allowing them a profit. But the ship owner and the people that charter ships are presumably as savvy on the direction of rates. So all charters are made with a theory as to the direction of charter rates. I'm not understanding the premise for STNG to make a profit on ships that are chartered in. I see plenty of shipping companies that charter in these vessels. I just don't understand how they expect to reliably finesse the ship owner enough to make a good profit.
Are these chartering-in arrangements made only when the market for vessels is momentarily devoid of lessors? So, STNG's function is like the "market maker" in the stock market. STNG provides liquidity for the market at a time when this very thinly traded market is devoid of buyers and, in fact, STNG gets the vessel at a below market rate.