Pacific Basin racked in TCE earnings of $7,360 per day for supramax vessels and $7,040 for handysize vessels in the third quarter, and its year-to-date average supramax and handysize daily net TCE earnings rose to $6,430 and $6,400, surpassing the BSI and BHSI by 21% and 44% respectively.
However, dry bulk freight market indices for all bulk carrier types have only started improving from historically low base seen in the first quarter, allowing Pacific Basin to easily outperform the market.
“The market benefitted from seasonally strong US grain export volumes during the third quarter, as well as increased iron ore and coal imports into China. However, the market remains depressed oversupplied with vessels, and conditions are still challenging for shipowners,” the shipowner commented.
As at 30 September 2016, Pacific Basin has secured cover for the final quarter of 2016 with 75% of its 4,950 contracted supramax revenue days at around $7,460 per day, and 74% of its 10,910 contracted handysize revenue days at around $7,960 per day.
Pacific Basin believed that more scrapping is required for the market to return to a healthier balance from loss-making freight levels at present.
“While self-correcting supply-side dynamics forced surplus capacity out of the market place in the extremely weak first half of the year, scrapping reduced in the third quarter and it is expected that the global dry bulk fleet will register a small net growth in capacity for the full year 2016,” the company said.
“The entry into force of the ballast water management convention in September 2017 will add to existing pressures on owners to scrap older and poorly performing ships, and thus shrink the oversupply, rather than invest in costly ballast water treatment systems and dry-docking.”
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