After a miserable start to the year, the Baltic Dry Index soared to the highest level so far in 2019 this past month. But according to prominent dry bulk chiefs Robert Bugbee, Hamish Norton and Polys Hajioannou, the recovery has only just begun.
The first quarter of 2019 ended with another deficit for dry bulk company Scorpio Bulkers, although the deficit was slightly smaller than the deficit from the first three months of 2018, shows the company's interim report.
Although 2019 got off to a rocky start, in part due to January's dam catastrophe in Brazil, several prominent dry bulk shipping companies maintain their belief that the market will improve in the second half of 2019 and in 2020.
One of the world's largest tanker shipping companies will tap the capital market to raise USD 300 million. A big part of the shares will be bought by Scorpio Bulkers. Analyst notes that the capital injection comes ahead of the 2020 regulations.
Scrubbers will likely be regulated out of the market within three to five years, says Scorpio president Robert Bugbee to ShippingWatch. The group is nevertheless investing in technology for both its carriers.
Scorpio Group, which covers Scorpio Tankers and Scorpio Bulkers, will install scrubbers on most of ships for both its shipping companies. The group is currently negotiating with creditors to finance the scrubbers.
Suppliers are not good enough at consulting and helping their customers when problems arise in relation to ballast water management systems, says Ole Christian Schrøder, Head of Compliance at Scorpio Group, which has so far spent USD 100 million on the systems.
Three listed dry bulk carriers will break the negative cycle and be the first to present positive earnings in the dry bulk market, according to Morgan Stanley, as rates on this market continue to rise.
The New York-listed dry bulk carrier booked a net deficit of USD 13.4 million in the second quarter, almost a 50 percent reduction compared to last year. Rates stabilized in the quarter due to increased Chinese iron ore and coal output, notes the carrier.
Bulk carrier Scorpio Bulkers' earnings more than tripled in the first quarter, but the carrier is still sailing with losses on the bottom line. The carrier has made a USD 17 million impairment on ship values.