Hong Kong's Jinhui Shipping and Transportation is holding back on fleet renewal due to a lack of clarity over fast-moving decarbonisation regulation.
The 18 supramaxes and post-panamaxes that the Oslo-listed company controls were built between 2002 and 2012.
Vice president Wei Man Ching told analysts on a conference call: "Why are we not rejuvenating our fleet? Well, we do not have the full confidence right now of how the regulations of vessels will trend.
"Is the next generation going to remain the current diesel engine? The actual regulation, the environmental regulation, we want more time to see how that changes.
"And if you see how newbuilding prices have been trending, while we are shying away from newbuilding prices, they keep dropping."
Ching is "cautiously optimistic" about a rebound in demand for dry bulk cargoes.
Markets looking up
"We believe that industries worldwide will eventually need to catch up, given a lot of the procurement of the cargoes — be it energy, industrial or agricultural commodities — have been pulled back, given the macro backdrop, but these will have to normalise," he said.
Scrapping has been "very, very low", but he is forecasting an upturn in recycling.
"There are a number of old tonnages in the market that will go to the scrapyard as soon as the situation allows. We see that the scrap price is coming back up again."
He mentioned market rumours that capesizes are being torched for $400 per ldt, "so we believe the overall demand-supply situation will improve".
Financing problems
Jinhui is also banking on there being vaccines for Covid-19, hopefully by the end of the year.
"And I believe, overall, [from] what I see in Hong Kong and what I learned from friends as well as business counterparts all over the world, we are getting more and more used to how to protect ourselves against the virus," Ching said.
"So ... I see definite light at the end of the tunnel."
But he said problems with Asian cruiseship operators during lockdowns "will negatively affect lending towards the overall maritime industry ... especially for any aspiring new entrants to the industry."
"So banks will be very, very cautious to lend against the owner of ships," he added. "With this in mind, we see that the newbuildings will continue to remain in check, which is a positive news, given fragile demand side."
The company remains confident it can refinance $60.8m of its debt coming due in the next 12 months, however.
