Pacific Basin Puts the Breaks on Fleet Growth Plans

8 April 2020

Pacific Basin was very open about its fleet growth plans and was eager to pursue Japanese-built second-hand bulkers, Suezmaxes in particular, staying clear of contracting newbuilds.

 

However, logistics disruptions across the globe caused by measures aimed at curbing the spread of COVID-19 as well as weaker dry bulk demand have forced all shipowners to cut their costs and halt new investments.

 

Commenting on its first-quarter results, Pacific Basin said that its vessel earnings held up well despite a weak Chinese New Year period, including the negative effects that COVID-19 containment measures have had.

 

The company’s Handysize and Supramax daily time-charter equivalent earnings averaged at USD 8,020 and USD 11,310 net per day in the first quarter, representing a 12% reduction and 9% increase respectively compared to the same period in 2019.

 

During the first quarter, the dry bulk owner took delivery of three secondhand vessels, one Handysize, and two Supramaxes, which were purchased in 2019. The company’s owned fleet currently stands at 117 vessels.

 

“Although we had a few logistical delays, our ships continued to trade largely as normal in the first quarter, partly due to the delayed impact of COVID-19 containment measures on the freight market, but also because we benefited from the relative resilience of global shipments of agricultural products, construction materials and other minor bulks. As a result, Handysize and Supramax rates were much higher than Capesize rates in the first quarter,” the company said.

 

Looking beyond the first quarter, Pacific Basin expects that the effects of COVID-19 containment measures and weak spot market rates will negatively affect its second-quarter earnings.

 

“We expect grain and agricultural product trade flows to be the least impacted by the outbreak, as demand for food and animal feed are less affected by economic shocks,” the company added.

 

“However, shipments of construction materials such as steel products, cement, logs and bauxite will be impacted by reductions in GDP, and coal shipments are also expected to suffer from lower energy consumption and competition from cheap oil and gas.”

 

Nevertheless, the shipowner is bullish on the recovery of the economic activity once the pandemic is contained and the resulting rebound of dry bulk trade flows.

 

Comments (0)


Today
8:03am
Hi Jenna! I made a new design, and i wanted to show it to you.
8:03am
It's quite clean and it's inspired from Bulkit.
8:12am
Oh really??! I want to see that.
8:13am
FYI it was done in less than a day.
8:17am
Great to hear it. Just send me the PSD files so i can have a look at it.
8:18am
And if you have a prototype, you can also send me the link to it.

Monday
4:55pm
Hey Jenna, what's up?
4:56pm
Iam coming to LA tomorrow. Interested in having lunch?
5:21pm
Hey mate, it's been a while. Sure I would love to.
5:27pm
Ok. Let's say i pick you up at 12:30 at work, works?
5:43pm
Yup, that works great.
5:44pm
And yeah, don't forget to bring some of my favourite cheese cake.
5:27pm
No worries

Today
2:01pm
Hello Jenna, did you read my proposal?
2:01pm
Didn't hear from you since i sent it.
2:02pm
Hello Milly, Iam really sorry, Iam so busy recently, but i had the time to read it.
2:04pm
And what did you think about it?
2:05pm
Actually it's quite good, there might be some small changes but overall it's great.
2:07pm
I think that i can give it to my boss at this stage.
2:09pm
Crossing fingers then

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