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.