Pacific Basin to Add Supramax Trio
- Business & Finance
Hong Kong-based dry bulk shipping company Pacific Basin Shipping Limited is to expand its fleet with a further three secondhand Supramax vessels.
As informed, the company recently committed to buying for cash three ships from undisclosed shipowners.
The trio is scheduled for delivery over the next three months, Pacific Basin said in Q1 2019 trading update.
During the first quarter of 2018, the shipping company also took delivery of two secondhand vessels – one Handysize and one Supramax. What is more, Pacific Basin accepted delivery of a Supramax bought in late 2018 and completed the sale of an older, small Handysize bulker.
These acquisitions will increase the company’s owned fleet to 115 units by July. Including chartered ships, Pacific Basin operated an average of 220 ships overall during the first quarter of this year.
From January to March this year, the company generated average Handysize and Supramax daily time-charter equivalent (TCE) earnings of USD 9,080 and USD 10,400 per day net, representing a 3% and 8% reduction compared to the same period in 2018.
As of April 9, Pacific Basin has secured 36% of its 29,410 contracted Handysize revenue days at around USD 9,360 per day net and 58% of its 14,020 contracted Supramax revenue days at around USD 10,690 per day net for the remaining three quarters of 2019.
As explained, the dry bulk freight market in 2019 has started weaker than the last two years due to trade war uncertainty and Chinese import policies. This led to weak spot market rates in the first quarter overall.
However, the company’s Handysize and Supramax markets improved significantly during the second half of the quarter with marked increases of 58% in the Baltic Handysize Index (BHSI) and 38% in the Baltic Supramax Index (BSI).
In contrast, the larger Capesize vessel segment has seen little recovery and continued to weaken throughout the first quarter.
Referring to the outlook for 2019 which has been revised downwards due to the softening market, Pacific Basin said that a resolution to the trade conflict between the US and China would provide “a welcome boost to the market”.
The company added that IMO 2020 sulphur preparations should lead to increased supply disruptions in H2, which could compound dry bulk market strength that typically builds in Q3 and Q4.
“Despite short term volatility and in view of the combination of continued healthy growth in minor bulk demand and reducing Handysize and Supramax fleet growth, we continue to believe that the longer term fundamentals for our vessel segments are positive,” Pacific Basin concluded.