Precious Shipping managing director Khalid Hashim says the solution to the bulker sector's current slump is very simple.
Vessel supply needs to be cut through recycling - and owners need to refrain from ordering new vessels, he said.
"The solution has been ever-present but shipowners are their own worst enemies and their refusal to get on with recycling has led us to the current situation where the demand side of the market is no longer able to absorb all the ships that haven't been recycled," Hashim added.
"So, is there a fundamental problem on the demand side? We don't think so."
He said factors like the US-China trade war, slowing GDP growth, accidents at iron mines in Brazil and weather-related slowdowns in Australia have all had an effect on the market.
This has coincided with growth in the bulker fleet due to a "virtual halt in ship recycling."
"The perfect storm, you could say," he added.
"And yet the solution is staring shipowners in their collective faces. Recycle more ships; stop ordering additional new ships; delay new ships already ordered. Simple, but apparently impossible to get done."
Earnings down in fourth quarter
Precious logged net profit in the fourth quarter of $0.94m, down from $4.64m in 2018, but its first positive earnings in 2019.
Daily operating costs were $4,788, which took the annual figure to $4,778 per day per ship, slightly higher than its target of $4,750.
Hashim said the company is currently more confident about prospects for 2020 than it was a few weeks ago thanks to the process of global economic tensions being resolved.
He expects a recovery to be characterised by extreme volatility due to a close balance between supply and demand.
"Any small change in demand or supply would have a disproportionate impact on the BDI and profitability," he said.
