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Precious Shipping: Predicting dry bulk’s future

Bangkok: Always one to have a firm opinion on the markets, Khalid Hashim tells Maritime CEO that there is still no recovery in dry bulk, and that the bottom of the next cycle could be about five years away.

The managing director of Thailand’s Precious Shipping is well known for sharing his views on where dry bulk is headed. He says he thinks that dry bulk is at the lowest point for this year and that the fourth quarter will show the permanent signs of the up cycle kicking in.

“At the moment there is no recovery. The recovery should start to show its teeth in Q4 of this year,” he says, suggesting that it will then further strengthen during 2015 and into 2016.

“Depending on how silly shipowners get during this recovery, they will do their best to ensure that the recovery is short lived by ordering lots of ships which will start to deluge the market in 2017 to 2018,” he warns. The bottom of the next cycle could be in 2019/2020, Hashim reckons, when it would once again be time to look at buying younger assets to replace or rejuvenate an existing fleet.

When it comes to fleet rejuvenation, Precious is one of the companies in the midst of such a programme. What Hashim is quick to stress, however, is that Precious is not looking to grow the fleet greatly, merely make it younger.

Precious currently has 43 ships in the water including four brand new ships – two 21,000 dwt cement ships and two 64,000 dwt ultramaxes – delivered this year.  There are another two 21,000 dwt cement ships that will be delivered in August and November this year. That will be followed by 17 ships in 2015 and another six in the early part of 2016.

That would take the fleet to 68 ships but, Hasim quickly stresses, the plan is to sell between 18 to 20 older or less eco-friendly ships next year to leave the fleet standing at around the 50 mark, slightly lower than Precious’s last peak of 54 ships achieved in 2005.  The difference will be in the size – 25,000 dwt versus 48,000 dwt and age – 20 years versus 3.5 years – of the current fleet.  [25/07/14]

NEED TO KNOW:  Precious Shipping
Founded in 1989 and listed in 1993 Thailand’s Precious Shipping is one of Southeast Asia’s top names in the dry bulk sector. Current fleet stands at 43 ships, with another 25 ships still to deliver.


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