All week, Splash will be bringing readers reports from Geneva Dry, the world’s premier commodities shipping conference, which took place on April 28 and 29 with more than 820 delegates in attendance.
Up first in our coverage is the Commodities Shipping Outlook, a high-level scene-setter to open proceedings, designed to give delegates an indication of what to expect in the coming 24 months.
From geopolitics to demand forecasts, new regulations, fuels and new technology this session covered a huge amount of ground in a short amount of time, co-moderated by Splash editorial director Sam Chambers and Nick Brown, the corporate affairs director for marine and offshore at Bureau Veritas, with a heavyweight speaker lineup featuring John Xylas, the chairman of INTERGARGO, Fednav’s Paul Pathy, who is about to become president of BIMCO, as well as Saad Rahim, Trafigura’s chief economist.
What is the lifespan of your assets?
Quizzed as to how often he was having to change his global economic projections, Rahim replied: “I would say hourly, but it’s probably more likely by the tweet or by the Truth Social post.”
Discussing tariffs, Rahim commented: “I think the keyword now is uncertainty… We’re now in unprecedented uncertainty for a little bit.”
Rahim said China has diversified away from an over reliance on the US since the first Trump trade war eight years ago.
“Overall, I think China is in a much better position, hence the reason that they’re not coming to the bargaining table anytime soon,” Rahim argued.
INTERCARGO’s Xylas, who also heads up Greek owner Ariston Navigation, said today’s trading conditions were indeed unprecedentedly uncertain, worse in many ways than the nadir shipping experienced in the mid-1980s.
“You don’t have that certainty today because you don’t know what is the lifespan of your assets. Is it 25 years? I’m not sure,” he said, stressing that this was especially pertinent regarding newbuilds, something picked up by Fednav’s Pathy, who noted that typical supramax rates today hover around the $10,000 a day mark and yet need to return twice that over the next 25 years to pay for a newbuild.
Given today’s high newbuild prices, combined with mediocre rates and uncertainty over future fuels, both shipowners on stage urged delegates to stick to the secondhand market to buy time until a more certain picture returned.
Pathy, who had just flown in that day from Fednav’s Montreal HQ, worried about prospects for global trade this year, telling delegates: “When you factor in the Trump tariffs and all the other effects of this administration’s policies, you start just increasing the cost of everything and increasing the cost of things is generally bad for trade.”
The Canadian said that the current US administration was “pouring fuel” on an already inflationary environment, which he said was likely detrimental to world trade.
At least, for non-Chinese owners the Chinese tonnage penalties recently introduced by the US Trade Representative look to have a minimal effect of the dry bulk fleet, Pathy said.
Tomorrow, Splash will be bringing coverage of Geneva Dry’s special session on electric vehicles and how they have been supercharging certain dry bulk trades.
Delegate passes for next year’s Geneva Dry scheduled for April 28 and 29 are on sale now.
