This is the Chorus Call conference operator. Welcome and thank you for joining the d'Amico International Shipping full year 2021 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo d'Amico, Chairman and CEO. Please go ahead, sir.
Thank you. Good afternoon to everybody. Thank you for joining us in this call. We go straight to the presentation, and I would jump the executive summary because it would be a repeat of what we are going to say in the second stage. I think it's just useless. I leave the floor to Carlos Balestra di Mottola who is our CFO. Carlos, the floor is yours.
Thank you, Paolo, and good afternoon to everyone. As usual, we start with a slide, a quick overview of our fleet profile. We control the 37 vessels at the end of the year. Over 70% either owned or bareboat, or controlled through bareboat contracts. For us, bareboat contracts are just alternative financing arrangements. Mostly in MR fleet, 25 out of these 37, and then an equal presence of six vessels in both the LR1 and Handy segments. Young fleet, average age of 7.1 years, mostly IMO class and, more importantly, mostly ECO vessels. Today this is a very important feature given the very high fuel oil prices that we are confronting. These ECO vessels are providing us a very important earnings upside relative to conventional vessels.
We as you know renewed our fleet, ordering vessels since 2002, which were delivered to us between 2014 and 2019, 22 newbuildings, and that is why we benefit from such a young and efficient fleet. Going forward, CapEx commitments haven't changed very much since we last presented our Q3 results. Declining CapEx commitments now only related to maintenance CapEx. 2022 figures are just over 50% of the 2021 figures, which were just over 50% of the 2020 figures. Has been declining, and it is over the next three years, it should stay at a pretty stable and low level.
We by now have installed ballast water treatment systems in most of our vessels, and we don't have any newbuildings on order. Going on to the following page. We are glad to, as previously announced, confirm that we have refinanced already all our debt maturing in 2022. One of these loans was drawn down at the beginning of this year. The rest was already drawn down at the end of 2021. We are now starting to work on the refinancing of the 2023 maturities, which are more substantial, almost $110 million, the balloons relating to those financings.
We are seeing quite a lot of appetite, and so we expect to be able to achieve attractive terms and to close these refinancings in the not too distant future, but definitely before the end of the year. In terms of bank loan repayments on our own vessels, these have been declining and are expected to continue declining. We had some financings with some additional working capital facilities, which had a faster amortization profile and which we are either refinancing today with new bank debt or we will be fully repaying in any case over the next few years. That explains the continuing downward trend in that respect.
We are also lighter in terms of financing obligations going forward. Going on to the following page, the purchase options, this hasn't changed much from the last time. As you know, we exercised the purchase option on the High Priority. We still have eight vessels which are financed through bareboat structures, and they all have purchase options, and there are seven of these that are already exercisable. One will have its first exercise date in March 2024. They are all in the money or theoretically in the money.
At the right time, as soon as we see sustainable strong rates, we will be looking to exercise these options and to refinance them with traditional bank debt at a lower cost, so reducing our financial break-even. Going on to the following page, the employment of our fleet. We recently added this blue line because we also have now one vessel bareboat chartered out, which is quite unusual for us, but we kept the technical management of the vessel. This employment was at a very attractive rate for us, a very profitable rate. That explains why there is this increasing delta between the blue and the yellow lines.
Most importantly, the blue lines, which includes both the bareboat charter out contracts and the time charter out contracts, is rising over the course of the next two years. It reached a trough in the Q4 of 2021, and we are now starting to experience an increase in these rates. It's also quite positive. We believe that our coverage does fall over the next few quarters. It's still quite high in Q1, but it then falls to 32% in Q2, and then much lower in Q3 and Q4. We do expect a much stronger spot market in the second half of the year, and in particular, in Q4.
Of course, we are now going to comment more on this later, experiencing exceptional circumstances given the conflict in Ukraine and this has helped very much our markets. We don't know for how long this will last, and Paolo will cover this more thoroughly in his part of the presentation. We are now, in this very moment, experiencing quite strong rates, which of course are strong for different reasons from the ones we would have expected and are also linked to the invasion of Ukraine. Also on this page, we show underneath how the percentage of our fleet, which is ECO, has been rising over the last few years.
As I mentioned, this has become a very important factor today, because of the very high fuel oil prices that we are experiencing. The earnings differential between ECO and conventional vessels has increased significantly. We are glad that, for all our controlled vessels, the percentage of ECO vessels in 2022 is going to be 80%, and this should continue rising over the course of the next few years as we sell some of the older vessels that we still have in our fleet. Going on to the following page, we show the sensitivity of our earnings to a change of $1,000 per day in the TC equivalent earnings.
It is of around $9 million in 2022, and it rises to $12 million in 2023. There is quite a big upside potential in a strengthening market, which as you probably saw looking at other shipping sectors which are now going through an upcycle. When markets do strengthen, they do strengthen. They can strengthen quite dramatically depending on the dynamics which are underlying this recovery. Therefore, we are glad that we have this increasing sensitivity going forward to what we expect to be a recovering market. We also worked quite hard on the cost front over the last few years.
We are glad that even in 2021, despite the inflationary pressures that we are starting to experience, we managed to keep our daily operating costs under control and only marginally higher than in 2020, but still well below the costs in 2018. A 5% decrease. The same applies to the G&A, where we did experience a slightly more pronounced increase in 2021, but we are still well below the 2018 figure. There is also a currency effect that penalized us in 2021.
It is true that the dollar has strengthened quite significantly because of its safe haven appeal in the course of 2022, but on average in 2021, it was weaker than in 2020. That is one of the factors which explains this increase in G&A costs last year, since 75% of our G&A costs are in currencies other than the US dollar, mostly in euros. Going on to the following page, a quick snapshot here of our financial structure. At the end of 2021, the ratio between the net financial position and the fleet market value was just over 60%. We ended the year with $43 million in liquidity.
This is in terms of ratio net financial position to fleet market value. We saw quite a big improvement relative to the figure at the end of 2020, which was closer to 66%. This is thanks to our strategy of continuing to dispose of our older vessels to generate liquidity and strengthen our balance sheet, but also due to the increase in asset values we experience in the second half of the year.
Partly driven by the pool effect of the increase in newbuilding prices and in demolition prices, partly associated with the sharp increase in steel prices, but also on the newbuilding front with the many orders that were received by yards for other types of vessels, leading to most of their building capacity being filled up, and therefore their pricing becoming more aggressive. Pro forma for the disposal of the High Valor, which occurred in the first few days of January, on the fourth of January. Our liquidity at the end of the year would have been of just so $51 million, and the ratio of net financial position to fleet market value would have been just under 60%. These are ratios which we are quite happy with.
Of course, we will continue to seek to deleverage our balance sheet. Given the very young age of our fleet, we believe these ratios are sustainable and healthy. Going on to the following page, we see that our loss for the year was $37 million, and our loss in Q4 was $8 million, excluding non-recurring items. Our loss in Q4 was around $6.5 million and $29 million for the year.
The known recurring items are mostly related to the disposals of the vessels that occurred in 2021, the High Venture and the High Valor, which didn't occur in 2021, occurred in the beginning of 2022. The vessel was classified as held for sale at the end of 2021. Therefore we valued it at fair value at the end of the year. Going on to the following page, we show in more detail the evolution of our spot and TC covered average rates during the different quarters. We see that.
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In Q4 2021, our average rate achieved on the spot vessels was $12,000 per day. It's important to highlight that this figure is higher than that achieved in Q4 2020, where it was around $11,700 per day. This is, on a year-on-year comparison, Q4 2021 is the first quarter where we have an improvement relative to 2020. In Q3 2020, we had earned $12,900, and in Q3 2021, only $9,200. There was definitely an improvement already at the end of last year. This preceding, which preceded, of course, the invasion of Ukraine by Russia.
This improvement was linked more with the market fundamentals, the underlying market fundamentals, which we see as very strong and which, irrespective of what happens in Ukraine, of course, we want this war to end as soon as possible, is going to be supporting our market. It's also important to note that, relating to the Q4 results, although we don't have the detail here, the figure of 12,000, just over 12,000 on the spot market is composed of a very weak October, a better November and a strong December. In December, we were actually, I would say, pretty much at breakeven. That was the first breakeven month for us in quite a long time.
The fact that we experienced this rally in last winter and at the end of last year is a very good sign that there is some tightness in the market and that the bad weather, which is usually experienced in these winter months, coupled with the additional volumes which are usually traded during these months, was enough to generate this rally, which we did not experience at all in 2020, where we had a flat and low market throughout Q4. Overall, including the time charter contracts, which as usual we benefited from, it has proven the right strategy over the last few years to cover a part of our fleet.
In Q4, we benefited from an average rate of around $14,500. Our blended earnings was around $13,200 in Q4, and our blended earnings for the year was just below $13,000. I pass it over to Paolo d'Amico, who will now be covering the market overview.
Thank you, Carlos. Let's go to the first slide at page 18. We show here that there is a quite big potential upside on asset values. Of course, I would skip the spot rates and the time charter rates because they are not really actual. This can tell you about 2021, but what's going on today is a different story due to the conflict. On the asset value, we still have a lot of space to grow, so I think today's value, let's say would be a good buy. Let's put it this way. Going on, COVID is receding. Of course the pandemic is in an improved mood.
The only thing that we can say here, but this is my personal opinion. I'm afraid that we, all these refugees coming over from Ukraine, we can have a restart of a pandemic because as you know, in Ukraine we are just vaccinated—only 30% of the people are vaccinated, so 70% are not. It's possible that we are going to have a restart there. The demand is recovering, demand of oil and demand of products. People are moving again. The runs are increased by 3 million barrels a day on average. We should go up to close to 4 million, which is exceeding the 2019 levels in Q4.
We are throwing on our back the reduction which was due to the COVID-19. The refined products inventories are very low, and this is a good thing for us because it means that we have to rebuild the stocks. Rebuilding the stocks is always creating an increase of demand. Now we have this increase of a barrel by OPEC+, which is theoretical because many of the OPEC countries are not in condition to honor their increased quota. It's been calculated that we are something like 1 million barrels less from the official number. And of course, this is creating a very tight market. The vessels are running again.
Now, how long this is going to be has to be seen because as you know, gasoline is already at $4.20 per gallon, and diesel is already at $4.80 going to $5 a gallon in the United States. U.S. is a big market for us because in May starts the driving season after Memorial Day. It goes through the whole summer. With this, with these prices, we do not know what really is going to happen. As you know, Americans are very sensitive to a price of a gallon. We have to see how it's going to what is going to happen. The jet fuel is the same thing because also jet fuel is increasing in price.
The number of commercial flights is growing every day because people are traveling more and more we go ahead and more we are traveling. Here again, we have to see what happens with COVID because if, as I'm afraid, COVID will be back. I don't know what government are going to do. Certainly not. I don't expect they are going to do the same lockdowns that they used in the past, but let's see. As you can see, everything is very, very fluid and very volatile, I would say. The impact of the Ukrainian war is a scenario which is evolving every day. Our market went in a state of shock like all the markets in the Western world. We can load in Russian ports.
I mean, we are not under sanction. Our activity is not under sanction for a moment. What is under sanction, of course, is where you're going to discharge because U.K. is not accepting ships from Russia anymore, and probably also EU and United States. Basically, the ships can go only from Russia to the Far East or Far Eastern countries. We do not go to Russia for the moment. We do not go because it's not clear the risk that you take. Of course, freight rates on whatever is originated in Russia are through the sky.
We do not want to take the risk of going there and maybe you have a further sanction which traps your ship in a Russian port or the same Russian authorities to hold your ship there. Is a risk that we don't like to take at all. In this moment, what I personally expect that Russians are going to sell discounted barrels of crude to China, and probably China are going to refine that barrel and resell it to us as diesel at full price. It would be a hell of a big deal for the Chinese, but this has to be seen. The moment is very confusing and very, as I said, very volatile.
The seaborne demand for transportation of refined products is the long-term demand is healthy and is always growing, and the participation of refined products to all the seaborne trade grew up from 25% at the beginning of the century to 36% today. The share of refined products in the overall seaborne trade is increasing. We have, as we saw that many times before, a big change in the refinery landscape and you have this new projects of refineries of latest technology, all of them, I would say, close to all of them anyhow, between the Middle East and the Far East and China. You have countries that basically gave up completely their refining capability, like New Zealand doesn't have one single refinery in function today.
Australia is reducing a lot. I think they are left only with four refineries. They are both big import markets for refined products. We expect, of course, a further reduction of the European refineries that are quite obsolete. We should expect a demand, a return of shale oil. Certainly with today's prices, it makes a lot of sense to drill. As you know, in the States, they didn't drill for quite a while because they focused on paying back shareholders and paying back bondholders. We didn't use resources for further investment. I think with today's price, we will start moving. The good thing of shale oil that you start drilling today and you have your barrel in six months' time.
It's a rather quick response. Going ahead. On the supply side, we have the fleet, the tanker fleet, getting older, and a very strong demolition market because the price of steel has gone by far higher than $600 a ton. To give you an idea, the VLCC, a big ship, but is basically worth between $18 million and $20 million today, which for a 23-, 24-year-old ship is a lot of money. We do expect many candidates to go to the scrap yard, and this should limit further the fleet growth and the supply too. We see it also from the next slide, the growing pool of demolition candidates.
The yellow line are the percentage of a fleet older than 15 years, and the blue one are older than 20. Older than 15 because commercially, the top oil companies they don't take ships on charter older than 15. Over 20, because you have really a physical and technical, the ship becomes really old from a technical point of view. The pickup in demolition is already visible. In 2021 will be a lot of something between 50-60 of our MRs are being recycled. We do expect this thing to go on more this year. As far as newbuilding orders, you can see the curve is extremely limited.
The number of ships, new ships coming to the market is extremely limited. If we add this to the demolition numbers, you can see that the fleet growth is really minimal. This should be as you see, the last slide tells us that we have a growth of around 0.5%, which is absolutely nothing. It just is basically flat. That is the end of the market part of your presentation. The only thing I can say today, I repeat, that things are extremely fluid. Of course, rates are improving everywhere. You don't need to go to Russia to have a better chartering rate today. As you know, markets, they are looking for an equilibrium, and at a certain point they will find the equilibrium.
There we have to see how far away we have to load for our destinations. The ton-mile should improve, and we expect that. We should have anyhow a better market than we used to have in 2021. Saying that, I think we can pass it on to the Q&A session.
Paolo, just quickly on the NAV. Quickly, a quick look at the NAV evolution before maybe we pass or we go over to the Q&A question, as we usually cover this slide too. Now, just to mention that our NAV reached a trough in March 2021, and since then it has increased steadily. And since September it is more or less flat. We ended with an NAV of $288 million. And which corresponded to a discount of our share price at the end of the year was at a discount of 55% to this NAV. The share price has since then been basically traded basically flat. This discount is unaltered.
It's one of the highest discounts we have experienced relative to our NAV in over the last 10 years almost. You know, we had maybe a slightly bigger discount in December 2018, but that maybe was justified by the very weak markets and maybe a less strong financial position at the time by our company.
Today, given the strong rates we are currently experiencing, of course, for the reasons we mentioned, which we don't know are sustainable, but more importantly because of the imminent sustainable recovery that we expect in the second half of the year because of the very strong fundamentals that our market benefit from, and because of our also much stronger balance sheet today, we feel this discount is definitely unjustified. We hope and expect it will shrink over the course of the next few years. We can pass over to the Q&A then.
Excuse me, this is the Chorus Call conference operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up your handset if you're asking a question. Anyone who has a question may press star and one at this time. The first question is from Matteo Bonizzoni with Kepler. Please go ahead.
Thank you. I have some question. The first question is regarding the environment for your business. You say that after the start of the Ukraine-Russia war, there was quite significant strengthening of the rate for product tankers. I don't know if you quantified during the call, maybe I missed it, but my question is if you can elaborate a little bit more about the current rates on the spot side which you are experiencing. Then I want some follow-up on this point regarding the slide 24 of your presentation, which is clear that Russia export around 5 million barrels per day of crude and 2+ million barrels per day of refined products.
I guess that you are making the point that Europe in particular could try for substitutes in farther area compared to Russia, and that could stimulate the seaborne transportation of both the crude and refined products. Can you elaborate a little bit on that point? The second question is regarding the refinancing which you announced last December at the end of the last year for $78 million. It's a sustainability-linked refinancing related to CO2 emission and also the evolution of the AER. I think I remember I read in the press release at that time. Can you elaborate a little bit more on how it works in terms of cost?
What is the cost of this refinancing, first of all, compared to your average cost of debt, and how it works as regards to these sustainability indicators? The third and last question is as regards the recovery of the asset values which we saw during 2021, which I think is mostly related to the increase of the steel price, but potentially not only to that. What's your view? Do you expect the asset value to keep this level or to continue maybe to increase in the next quarter? Thanks.
I'll pick up the first one. I leave the rest to Carlos. To give you an idea, an Aframax, which is a 100,000 deadweight tonnage, used to run at a rate of $6,000-$7,000 a day before. Going to Russia and coming in the Baltic and coming to North Europe is making $300,000 a day today. I mean, this is basically the difference of what's going on. This going to Russia, of course. Not going to Russia, we moved from a market which was roughly between, let's say $11,000-$13,000 a day before, to a market which is over $20,000 a day today. Now, this is not everywhere. It's in Mediterranean, in Caribbean Sea, and it's starting also in the Far East.
I mean, the market is improving little bit everywhere. This is as far as the market. I leave to Carlos the rest of the question.
Yeah. Thanks, Paolo. Now regarding the refinancing, in particular the sustainability-linked refinancing that we closed last year. The cost I would say was pretty much aligned or just below our average cost. But more importantly, it was below the most recent refinancings we had closed in the last few years, and it was 240 basis points over LIBOR ±5 basis points, depending on the performance of our fleet from an emissions perspective, relative to this AER trajectory. The KPI is based on the emissions of the entire fleet, not only the vessels financed by ABN.
As you see, I mean, the differential which is linked to the sustainability-linked indicator is not very significant. We are well below the AER trajectory. To be able to benefit from this discount, the five basis points discount, we have to continue doing very well. It is quite demanding targets that were set. We expect to be able to achieve them given the projections of the emissions of our fleet. I would say that you know, this is one reason why today we have quite a lot of interest from banks to work with us, is that we have such a young fleet which perform well from this perspective.
The major shipping banks financing the shipping sector signed on to the Poseidon Principles, whereby they commit to reduce the CO2 footprint of the vessels they finance. Therefore, they are looking to finance young vessels that have low emissions like ours. That allows us to achieve tighter pricing. We believe that we are going to be achieving even better pricing than we achieved on the facilities we closed last year and this year for the maturities of our loans in 2023. Yeah, I would say to...
There's also on the ABN facility an additional discount of around 5 basis points if we employ the vessels on long-term contracts, which are of 18 months or longer. The discount applies only to the vessels which are employed through such contracts. All in all, I would say it's a competitive facility. The other facilities that we closed last year have very similar terms in terms of pricing. The asset values we still see a lot of potential for further upside. There is definitely an effect which is linked to the increase in newbuilding prices and in demolition prices.
There is also an effect which is linked to the fundamentals of the industry, the expectations that we are very close to a recovery. Therefore, there is quite a lot of interest from buyers to acquire these vessels, which are still today trading well below newbuilding parity. Even the ECO vessels today are trading well below newbuilding parity. If you look at page 31 of our presentation, you see that a five-year-old vessel, which today is an ECO vessel, is valued at $30 million. While the newbuilding parity, which reflects today's newbuilding cost depreciated, is around $35 million.
That is, you know, at least, you know, the upside that we see in a market once we reach break-even levels. When we start becoming profitable and very profitable, we can very well go above the newbuilding parity curve, as has happened often in the past.
Thanks.
Yeah. I believe that's it for these questions, so I pass it over to you for further questions.
The next question is from Massimo Bonisoli with Equita. Please go ahead.
Good afternoon, and thank you for the presentation. My first question is on Russia. You mentioned before you do not want to take the risk to go to Russia with your ships, so your clients cannot use your ship to load and unload products in Russian ports. What about Russian players which have operation outside Russia? We know, for example, Lukoil in Southern Italy. Do you expect also not to have operations with Russian players outside Russia? The second question is on the hedging and the coverage. Given the fact that the spot rates are very high, do you expect to sharply accelerate your coverage going forward? Which forward prices are you targeting, 2022 or more longer dates?
Just a third question on the refinancing cost, if you can give us a quantitative guidance on the overall funding cost for 2022.
Here again, I pick up the first questions. No, we do expect Russians, of course, to go to Russia. They are going to do a big part of what is going to be the future Russian play. Because if my, let's say, feeling is right, and China and India are going to be the two big buyers of Russian barrels, you need somebody to carry on the product down there. It's going to be Russian ships and Chinese ships and probably what we call a ghost fleet, which is a fleet which has been operating against the sanctions on Iran. If Iran comes in the equation officially now, it doesn't need any more of this ghost ship, which probably will move onto Russian oil.
I think this is something that we should expect there. The problem Russian ships or Russian-related ships have that they cannot discharge in U.K., probably are not going to discharge in Europe and U.S. They have to go to the Far East, and let's say Far East and Middle East or whatever.
As far as the coverage, we are looking to all the opportunities the market is giving. To give you an idea, we just recently as last week fixed the Cielo Bianco, which is an LR1 for 5 months to Braskem, which is a chemical industry in Brazil, and is the biggest chemical company in Brazil. We fixed her for 6 months at $20,000 a day. The same ship was doing 5 days before $14,000-$15,000 a day. We saw this opportunity, and we took it. Where we see things that make sense, of course, we will do it. Carlos, you want to answer the last one?
Yeah. Yeah. Thanks, Paolo. Yeah, just to add to that on the coverage that we also-
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Okay. Perfect. Also relating to the coverage, I will add that we saw quite a big spike in the paper market a few days ago for Q2. We took coverage for part of a vessel in Q2 through the TC2, TC14 routes at an equivalent rate, which was almost $18,000 per day for a conventional vessel, which translates at more than $22,000 per day for an ECO vessel. I remind you all, 80% of our fleet is ECO.
That signals, you know, gives a bit an idea of what is the expectation also from the players operating in the paper market of the earnings that MR vessels could be achieving in Q2 this year. That was a small coverage. It's only part of a vessel that was covered, but it's just to give you an idea of what are these expectations. In relating instead to our financing, the cost of our funding will depend much more on how the forward rates move.
The swap rates that we will be able to achieve on the loans that we will be taking, you know, this year, and then on the margins that we will be able to achieve. As previously mentioned, we do expect, but I don't want to make, you know, comments on this right now, to achieve even tighter margins than we were able to achieve in the financings that we closed last year. It must be remembered that the new financings that are negotiated this year have to be already, from the beginning, based on the SOFR, not on the US dollar LIBOR.
Therefore, relative to the U.S. dollar LIBOR, based on the three-month reference, we are talking about 20-26 basis points less in terms of benchmark cost to which the margin is then applied. The current conflict in Ukraine, after very sharp increase in the swap rates over the course of the last few months, they have dropped a bit. There is an anticipation that the Fed might not move as aggressively in raising rates because of what is going on right now in Ukraine.
That possibly should allow us to then cover our interest rate exposure on the new loans we will be taking out this year at a lower average rate, hopefully. Thank you. I'll pass it over to you for further questions.
The next question is from Daniele Alibrandi with Stifel. Please go ahead. Mr. Alibrandi, your line is open. Hello? Mr. Alibrandi, maybe your line is on mute. Cannot hear you, unfortunately. Sorry. Hello? Hello? Can you hear me?
I can hear you.
Yes, I can hear you. We cannot hear Mr. Alibrandi. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Adrian Bignell with Quaero Capital. Please go ahead.
Hi there. Just a basic question on day rates. Obviously the conflict in Ukraine has meant a lot of ton-mile distances change around not picking up Russian crude or Russian product. How long do we think we will enjoy strong rates for? Is this something that's now shifted? This could be two years of strong rates.
Yeah. This depends very much on what is sanctioned and whatnot, and how the sanction will go on. Because if this thing finishes fast, as everybody hopes, and probably come to a certain type of agreement. Certainly, I don't think the world is going to be the same thing tomorrow because whatever it happens, because we found out finally, we realize how we are dependent on Russian, I would say on Russian energy. Because we have 40% of Russian gas coming over, we have close to 50% of Russian refined products, which are mostly middle distillate coming into Europe. We are very heavily on coal too, which is coming from Russia.
In fact, we have this funny thing that Germans are thinking of switching to coal, some power plants, but they are going to buy Russian coal at the end of the day. You know, it is and something will certainly happen and the landscape of our suppliers is going to change. I would say I tend to say that the ton-mile will increase and stay there in for quite a while. Then at that point in time, we have to see how big the fleet is and the supply side, how it looks like. If we have too many ships, there's not going to be a big improvement. If we, as we expect due to demolition and low newbuildings coming in, the fleet is going to be basically flat.
At that point, I think we are going to enjoy good rates for quite a while.
In terms of rates, I mean, I'm asking an impossible question, but I mean, could we see rates up as high as sort of mid-20s towards 30, do you think, and if sanctions hold up for this year?
Well, not on a constant, let's say, on a constant basis. It can spike up there easily in certain situation. It can easily happen this, but we cannot assume it as a future rate of the market, no.
Mr. d'Amico, Mr. Mottola, there are no more questions registered at this time.
Okay. I thank you very much for joining us on this call, and we go for the next one. Thank you again.