Khalid Hashim, the managing director of Thai dry bulk owner Precious Shipping, has urged his peers to get scrapping ships or face a very volatile future on the Baltic Dry Index (BDI).
Writing in his company’s second quarter earnings statement, Hashim was typically forthright in his opinion on what the market needs to do to ensure a more healthy outlook.
“Negative sentiment has started to dissipate from the market resulting in shipowners refusing to scrap their older ships,” Hashim wrote. This has allowed an overall net fleet growth of 1.6% in the first half of this year, he noted. “If scrapping doesn’t accelerate then the BDI will continue to fluctuate sharply solely dependent on what the demand side does,” Hashim wrote, adding: “In other words, shipowners are not helping their cause by not scrapping ships making the recovery in 2018 to 2020 event dependent, extremely volatile, and completely beholden on demand continuing to outperform.”
Listed Precious managed to record a net profit of $2.85m in the second quarter.