From his perch in Bermuda, Gary Vogel sees “a positive” hurricane approaching the dry bulk market.
Scott Bergeron talks about throwing “cold water”.
And Morten Arntzen is simply wary of any trend that’s unanimously forecast by Norwegian equity analysts.
Those were among the varied reactions to prospects of an IMO 2020 rates boost from shipowners on the opening panel at TradeWinds’ International Shipping Forum in Bermuda today.
Eagle Bulk chief executive Vogel, who is fitting most of his bulker fleet with exhaust gas “scrubbers,” appeared to be the most bullish on the impending market boost.
“It’s like waiting for a hurricane — hopefully a positive hurricane,” Vogel said in the session at the Fairmont Southampton hotel — a place that has withstood a few furious storms over the years.
“I’ve never seen such a period of expectation in my career,” he added.
Vogel is excited that barely 10% of vessels in Eagle’s core ultramax class will be fitted with the equipment, leaving competitors relegated to pricier low-sulphur bunkers after 1 January.
The Stamford, Connecticut-based company already is seeing its strongest rates in six years, Vogel said. While not overly robust at the “mid-$13,000s” per day — edging off more than $14,000 a few weeks ago — the rates are still encouraging, he said.
Ultramaxes burning compliant fuel could likely slow speeds by up to 5%, effectively taking 2.5% of capacity out of the market based on steaming days, Vogel said.
“No one has ever paid me extra freight for having more expensive fuel onboard, and I’m not expecting to give any discounts because I have cheaper fuel,” Vogel quipped.
Dorian LPG chief executive John Hadjipateras, who will have scrubbers on 12 of his 22 vessels, said he also expects a benefit, although he joked about internal debates “wondering which half of the company will be right”.
Hadjipateras forecast a period of “higher highs and higher lows,” at least “until the market gets detroyed again by over-ordering.”
Perhaps his strongest conviction is that scrubber critics are wrong.
“I’m not convinced by the anti-scrubber people,” he said. “In the best-case scenario, scrubbers will find a niche, and in the worst they will pay themselves off.”
Enter Bergeron, the new director of business development and strategy for Oldendorff Carriers, to approach the panel with the proverbial pail of cold water.
He did allow that the next six to eight months could be “an interesting time,” but worried that the party might be over by the second half of 2020.
“There’s a trade war, there’s a dark cloud hanging over the global economy that could create stagnation. So an interesting six months, but after that, I’m not so sure.”
And for Arntzen, the executive chairman of chemicals-tanker owner Team Tankers, it was time to fall back on what he admits is a well worn adage about the collective wisdom of Norwegian stockpickers.
“If all the Norwegian analysts are in agreement on the direction of any market, it never happens,” he said.
“I don’t think 2020 is a panacea for our industry. I don’t think this is a repeat of the single-hull tanker phaseout,” he said, alluding to the effects of the Oil Pollution Act of 1990 (OPA 90).
“I do, however, think it will be positive.”
