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Precious Shipping slumps to $75m loss in 'unthinkable' year for dry bulkPrecious Shipping slumps to $75m loss in 'unthinkable' year for dry bulk

After a year in which the “unthinkable” happened in dry bulk shipping Precious Shipping is forecasting “extreme volatility” in demand.

Marcus Hand, Editor

February 9, 2017

2 Min Read
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The Bangkok-headquartered handy specialist reported a full year loss for 2016 of $75.61m compared to a loss of $69.41m in 2015, however, in a positive sign Precious' Q4 2016 loss reduced to $3.34m compared to $42.16m in the corresponding period a year earlier.

The results came against a year Precious md Khalid Hashim described as the “worst ever” for dry bulk shipping with the “truly unthinkable” happening in the sector with BDI plunging to 290 points in February 2016. Other unthinkable events highlighted by Hashim included Brexit, the bankruptcy of Hanjin Shipping, the Ballast Water Management (BWM) Convention being ratified and the election of Donald Trump as US President.

“To put our annual loss for 2016 of $75.61m into perspective, please keep in mind that the average BDI for this year at 673 was the lowest in history,” he said.

Looking ahead Precious sees the demand side of the equation in 2017 as being characterized by “extreme volatility”. Downside risks included China's slowing economy, slowing imports of iron ore and coal into China, rising protectionism and shipyard overcapacity.

“But it is not all gloom and doom. The upside potential for 2017 consists of, amongst others, the ‘One-Belt-One-Road’ that China proposes to build linking some 65 countries from Asia/China to Europe at an expected cost between $1.4 to $21trn,” Hashim said.

On the supply side the level of scrapping is a key variable with 20.3% (160.16m dwt) of the existing world fleet that would be over 15 years of age during 2017 through to end of 2020. Current low freight markets and costly new regulations such as BWM convention should push these older ships to the scrapyard.

“If markets are bad, scrapping will be reasonably good in 2017. If that happens and ‘forced’ scrapping takes off due to the regulatory impact in 2018, we could have a few very interesting years ahead!” Hashim commented.

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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