Asian dry bulk owners rule out dry bulk mergers

Asian dry bulk owners have ruled out consolidation because the sector’s ownership structure is too fragmented. “There are so many small shipping companies that buyers are simply not interested,” Thomas Ng, managing director of Hong Kong-based Jinhui Shipping and Trading said during a panel discussion at the Marine Money Asia conference here today. The geographical nature of bulk shipping and trading patterns also preclude mergers and acquisitions, Ng observed. According to Khalid Hashim, MD of Thai-listed Precious Shipping, it is a choice between “paper and steel”, contrasting a company’s book value against the value of its fleet. Hsu Chih-Chien, Chairman of Courage Marine, which is listed in Singapore and operated from Hong Kong, pointed out that freight rates are so high that an owner with just one Panamax ship can make a profit of $20M a year. Hsu is sticking to the policy of operating only second-hand tonnage despite the cost of second-hand ships being higher than newbuildings. “We never know how the market may turn,” he told Fairplay.