Dry bulk shipping may be overreacting to a recent downturn in the sector, according to a Diana Shipping executive.
"We feel that the fear meter is on the high side, and there is some justification for being afraid for the demand," chief strategy officer Ioannis Zafirakis said today during a fourth-quarter earnings call.
"There is the thought of the demand going down but we also believe that this may have been a little bit overestimated."
Dry bulk charter rates and stocks have taken a hit recently after the January Vale dam disaster and US-China trade tensions caused worries over vessel demand.
Zafirakis said the worry has actually benefited the sector by lowering supply.
"The net effect is probably going to be more positive than everybody thinks," he said.
Enough cash on hand
Zafirakis said Diana Shipping has sufficient liquidity for market conditions, especially since the company is selling two 2001-built ships for $7.2m each.
At the end of 2018, Diana Shipping spent almost $15m buying back 4.2 million common shares and has enough cash to possibly repurchase more units, he said.
"Therefore, a tender offer is not out of the question," he said.
The Simeon Palios-led company had $126.8m cash on hand during the fourth quarter, an earnings report shows.
