Dry bulk owners have been urged to scrap more ships or face extreme volatility. Writing in Precious Shipping’s third quarter results report, the company’s managing director Khalid Hashim noted: “Negative sentiment has started to dissipate from the market resulting, unfortunately, in shipowners refusing to scrap their older ships.”
This has allowed an overall net fleet growth of 2.27% in the first nine months of this year.
“If scrapping doesn’t accelerate,” Hashim continued, “the [Baltic Dry Index] will continue to remain very volatile, solely dependent on what the demand side does. In other words, shipowners are not helping their cause by not scrapping ships, making the recovery in 2018 to 2020 slower, extremely volatile, and totally dependent on demand continuing to outperform.”
Thai-listed Precious notched up a $3.25m net profit in the third quarter, a big improvement from the $5.23m loss it registered in the same period of 2017.
Hashim is one of the world’s most respected voices in the dry bulk industry. This year marks his 40th year in shipping. His father was the chairman of the Indian National Shipowners’ Association and his great-grandfather was a founding director of Scindia Steam Navigation Company.