Athens: The worst dry cargo shipping market in 30 years could lead to increased lay-up of vessels, Angeliki Frangou, chairman and CEO of Navios Maritime Holdings, has said.
“Current charter rates are below the actual vessel operating costs. Typically, a depressed rate environment like this would cause accelerated scrapping and reduced deliveries, and we are seeing both,” Frangou told investors in the New York-listed company’s fourth-quarter 2014 results.
“Year to date, scrapping has accelerated to 4.2m dwt, more than half of 1% of the global fleet. We are also witnessing deliveries being delayed and a significant reduction in new orders compared to last year,” she continued.
“Should the current market environment continue, we may also see layups of vessels.”
Nevertheless, Frangou remains hopeful that the market will firm up eventually. “These developments suggest the market is rationalising and given the continued strong demand for the underlying commodities, we should expect a healthier market in the medium term,” she said.
The CEO said she was “pleased” with Navios Maritime Holdings’ financial performance for the quarter. The company booked revenue of $148.8m and adjusted EBITDA of $37.8m, and announced a 6-cent dividend, which represents a yield of about 6.0%.
