Bill Guo, executive director, shipping, ICBC Financial Leasing Co, expressed interest in exploring more deals in dry bulk shipping as the bank seeks to capture opportunities in a low market.
“We are looking to dry bulk now because the market is at a very low point and we have done some deals already over the past year. However I am not saying we want to invest in dry bulk in a big way immediately but rather keep an eye on the segment as a big potential in future,” Guo told delegates at the Capital Link International Shipping Forum China held in Shanghai on Friday.
He explained that the weak dry bulk market is in a very fragile state and any forms of major investments by owners and financiers on a slight rebound would bring the market down again instantly.
Guo pointed out that the coming into force of IMO’s global cap on fuel sulphur content at 0.5% from 2020 will deflate tonnage as elderly, less environmentally-friendly ships will be scrapped. Moreover, the prolonged low freight market has curbed newbuilding orders in the past two years and limited capacity growth.
“So far we have over 300 ships on our book valued at over $5bn in a pretty wide segmentation including bulkers, tankers, cruise and offshore,” Guo said. “But we would not invest in offshore as we are avoiding taking on deals with too high leverage.”
The offshore sector involving jack-up rigs, drillships and OSVs is an area that financial institutions are shying away following the collapse of oil prices, crippling offshore activities and magnifying the oversupplied situation in the market.
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