Khalid Hashim, the well respected head at Thai dry bulk line Precious Shipping, has warned of a “supply shock” likely to hit shipping come 2020 and new sulphur regulations coming into place.
Writing in Precious’s first quarter results roundup, Hashim suggested: “One way or the other in 2020, you are going to have a supply shock either through slow steaming of the entire fleet or a combination of scrapping of some of the older ships and the balance of the existing fleet slow steaming.”
An upbeat Hashim was able to report Precious made a net profit in Q1 of $3.43m as opposed to a loss of $1.7m in the same period last year.
The Precious managing director stated the prognosis for ton-mile demand growth in 2018 had improved since the start of the year, something he was confident would carry on into 2019.
Hashim even went so far as to hint that dry bulk could enjoy some of the highs seen in the previous decade.
“Another way to look at future prospects of the market would be to compare the current forward orderbook as a % age (9.85%) of the existing fleet as at the end of Q1 (819.94m dwt) and see when was it last as low as this number, that would be the end of 2002, and we all know what happened thereafter,” he wrote.
Hashim, in his 20-page report, also looked at the ongoing issue of trade tariffs, which he said tend to result in greater ton-miles sailed.
Always an entertaining writer of quarterly results, Hashim wrote: “When we look at the reaction of the various actors in this drama, China’s President, Xi Jinping looks like the adult in the room with Trump playing the part of the 3rd grade school yard bully. Let us hope that what has begun as name calling rhetoric/tweets will eventually be reconciled into an acceptable solution for all parties concerned and that, globalization as we have known it, will continue to be in the driving seat.”