Sohmen-Pao was one of the panellists speaking at the Global Forum of the Sea Asia conference held in Singapore on Tuesday as part of the Singapore Maritime Week.
“Near term, (I’m) pretty optimistic from now and the next few years because I think supply and demand is getting quite interesting,” Sohmen-Pao said.
On a macro level, China’s economic growth continues to be strong growing at 6.6% last year, adding $1.2trn to the world economy. Secondly, a growing middle class population from 1.8 billion in 2009 to 3.2 billion by 2020 will lend firm support to global demand.
Thirdly, even amid the US-China trade war, China exports to the US are at 4% of its GDP and US exports to China are at 3%.
“Fourthly, the global orderbook now is extremely low. It is less than 10% now for many sectors having been up at 50%. LNG is at 25% and it’s a bit worrying but most of the others are at 10% or less.
“And my last point is financing – yes there is too much availability of capital but capital discipline is coming back and banks are being more careful about lending. So there are a lot of reasons in the near term to be quite excited,” he said.
“But in the medium to long term we still have to be a little bit concern about these big shifts,” he said.
“Long term, one has to be very brave to invest in newbuilding today. You will get your ship in 2021, it will live until 2040-45, and we have no idea what the world looks like in 2030 let alone 2040. So if you look at technology ships, fuel ships, energy ships, decarbonisation, I think that’s a big question mark in the very long term.”