Khalid Hashim, a veteran of the dry bulk industry, has warned that the sector faces extreme volatility this year and next.
In issuing Precious Shipping’s annual report, Hashim, the managing director of the Thai-listed firm was able to report the company’s first quarterly profit since the middle of 2014. The $3.32m net profit in the fourth quarter was however unable to offset a full year loss of $3.76m.
“On the supply side, things look distinctly better with expected net supply increasing at about 1% during 2018 and 2019 whilst demand should be growing at between 4.0% and 4.5%, very similar to the demand growth seen in 2017, when supply grew by 2.93%,” Hashim wrote in a 16-page annual report. “This favourable gap between expected demand growth and expected supply growth in 2018 and 2019 should make for an increasingly robust secular recovery. As supply and demand balance is very close, this recovery would be characterized by extreme volatility as any small change in demand or supply would have a disproportionate impact on the BDI.”