Precious Shipping Poised to Offload Outdated Handys

Thailand-based Precious Shipping Ltd plans to rejuvenate its dry bulk fleet by scrapping its outdated Handysizes or by adding more fuel efficient ships.

The company’s Managing Director Khalid M. Hashim, told Platts on the sidelines of the Sea Asia global shipping conference in Singapore, that the company will either be “selling or scrapping some of our older ships, most likely towards the end of this year.”

The proceeds would most likely be used for expanding of the Ultramax fleet, which are more economic in terms of fuel consumption.

According to Hashim, Precious Shipping has 22 Ultramaxes already on order.

“It’s a question of survival over the next few years and to do this companies need to take action now to drive down costs and improve efficiencies.”

“They need to scrap, get rid of any non-core assets and raise finance to survive the current challenges that the industry is facing,” Hashim said while Speaking at today’s opening of Sea Asia 2015.

Overcapacity is one of the short-term challenges which is being compounded by softening demand in key markets, added Hashim.

“China’s steel production was flat last year while demand for coal dropped 40 per cent. These trends are bad news for the dry bulk shipping market which transports these key commodities.”

Speaking at the opening ceremony, Singapore’s Minister for Transport and Second Minister for Defence, Mr Lui Tuck Yew said Asia is fast becoming the engine of global growth and that the maritime industry needs to be prepared.

“All signs suggest that Asia will drive global shipping in the coming years. Shipping patterns have shifted and will continue to move towards Asia. In 2014, Asia accounted for almost 80 per cent of global container throughput,” he said.

Experts on the panel of the Sea Asia Global Forum agreed with Mr Lui and commented that growing economies present exciting opportunities for shipping and the broader maritime sector, particularly in Asia.

However, they added that with a number of challenges on the horizon, companies must operate as efficiently as they can to survive.

“The shipping industry is facing some short term pressure which means one has to be as efficient as they can.

“It’s not just about the size, it’s also about how you well you run your services with most efficient ships using technology and IT,” Managing Director, Pacific International Lines, Mr S.S. Teo said.