Live from Singapore Maritime Week 2018

The Seatrade Maritime News reporting team bring you all the key stories in the run-up to, and live on the ground during, Singapore Maritime Week 2018. The iconic week of events is held across the Lion City from 21-29 April including the Singapore Maritime Lecture and the Sea Asia LNG Forum.

2020 will be an “interesting year” for dry bulk: Precious’ Hashim

Already a strong advocate of the switch to low sulphur fuel oil instead of using scrubbers, Precious Shipping md Khalid Hashim suggested that not only is a switch to cleaner burning fuel the right thing to do, but could also be positive for the market.

Speaking at the BNP Paribas-Moore Stephens Singapore Shipping Forum 2018, he said the next two years should be profitable years for all and looking further ahead 2020 will be “an interesting year” depending on the market’s reaction to the two main upcoming regulatory issues.

As the sulphur cap kicks in Hashim sees that the simplest way to save on consumption is to reduce speed. He noted that reducing speed from 12 knots to 10 knots would effectively remove 17% of dry bulk shipping supply.

In particular ships older than 15 years old which comprise about 142m tons or 17% of existing fleet have the most potential for scrapping. “These guys have to make a decision,” Hashim said, as their older engines are not really able to burn low sulphur fuel oil and in addition, they will have to invest in ballast water treatments systems as their special surveys come up.

Read More: The 2020 0.5% sulphur cap – scrubbers vs LNG debate rages on

 “One way or the other in 2020, you’re going to have a supply shock either through massive slow steaming of the entire fleet or a combination of scrapping of older ships and slow steaming

In addition, the effective cost of capital is rising with a higher interest rate environment which should act as a dampener for newbuild ordering. Also lack of clarity with future environmental rules will act as a further barrier to new ordering.

Downside risks include geopolitical factors which could act as a speed bump to growth, as well as if US tariffs lead to lower than expected demand growth.

Read all the news from Singapore Maritime Week on our dedicated Live From Singapore Maritime Week 2018 page

Posted 27 April 2018

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Hong Kong and SE Asia Correspondent

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