Hong Kong-based shipping company Pacific Basin anticipates a reinforcement of the dry cargo market for smaller handysize vessels in the fourth quarter based on a seasonal rise in demand and a dip in the delivery of new ships.
That is the overall message in a trading update for Q3 – a quarter that yielded an average daily turnover for Pacific Basin of USD 9550 for 14,410 revenue days in its handysize fleet.
According to the company, that is well above spot market rates, which averaged at USD 7500 per day on the handysize market.
Pacific Basin: We outperformed the bulk market by 32 percent
“We expect a stronger seasonal demand combined with reduced deliveries of newbuildings at the end of the year to support a stronger handysize and handymax spot market in Q4, before the normal stream of new ship deliveries, the Chinese holiday period and road-related disturbances will cause a decline in rates in the beginning of the new year,” Pacific Basin writes.
The market for smaller vessels is normally less volatile than the one for larger vessels. Keeping that in mind, Pacific Basin expects handysize and handymax spot markets to continue to demonstrate a gradual improvement in the medium term, the update reveals.
Demand for dry cargo goods is expected to remain as healthy as it has been in the past year. In spite of the latest seasonal uplift for capesize rates, the company still believes that it will take the market some time to absorb the oversupply of vessels that has been seen on the market for larger ship types. Consequently, it will be a while before the market experiences a lasting improvement.
In the long run, however, the assessment of Pacific Basin is that the fundamentale positive demand conditions in the dry cargo market are intact.
Cargill: Dry bulk set to leave dark years behind
Pacific Basin pursues three new ships