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The move is alongside the company's plan to purchase 18 newly built vessels worth US$588 million (Bt19.76 billion). The new vessels will be delivered between 2010 and 2013, bringing Precious Shipping's fleet to 62.

Its current fleet of 44 vessels totals 1.13 million dead weight tonnes, an average of 25,688 tonnes per ship.

Managing director Khalid Hashim said he could not predict whether the plan to buy additional ships from the second-hand market would be implemented this year, as it depends on market opportunities.

The Baltic Dry Index marked an average of 8,556 points in the first half of the year, peaking at 11,793 on May 20.

Meanwhile, Precious Shipping's freight rate peaked at $16,511 per day per ship in the second quarter, driving its net profit for the period up by 49 per cent year on year to Bt1.2 billion.

Hashim said that, apart from adding ships to the company's fleet, it has fixed ships on long-term time charter when markets are high, achieving 50-per-cent forward cover on a rolling four-year basis.

He added that the company had locked into the long-term contracts until 2011. About $247 million of Precious Shipping's freight has been booked in this way, representing 96 per cent of its overall freight business.

The company has booked $159.8 million for long-term contracts - 64 per cent of its total - for next year. Twenty-eight per cent is booked for 2010 and 13.71 per cent for 2011.

To serve higher demand for dry bulk shipments, Hashim said the company would not scrap its older ships during the upcoming purchase period. The average age of its fleet is now 27 years, but this is expected to fall to 10 to 12 years after 2013.

Hashim said the company would also exploit the spot market in order to maximise profit.

He said demand for dry bulk shipments was still on the rise, mainly driven by iron ore, coal and steel, especially from emerging markets like China, India and the Middle East.

"We retain a targeted average freight rate of $15,000 to $16,000 per day per ship for this year, despite already hitting the target in the second quarter," Hashim said.

Many brokers rate a "buy" for Precious Shipping's stock, given its solid earnings for the second quarter and good prospects in the rest of the year buoyed by a rise in global bulk shipping demand amid tightening supply this year.

Asia Plus Securities has given a "buy" rating to the stock. It also revised up its revenue projection for the year because the company's first-half earnings accounted for 60 per cent of its forecast.

The research said the Baltic Dry Index, which is near its bottom, was likely to rebound again after the end of the Olympic Games through to the middle of November, when China resumes importing iron ore and coal.

KGI Securities (Thailand)'s research unit, however, maintains its "neutral" rating for the company's shares.

The broker has revised Precious Shipping's earnings upward by 13 per cent to Bt4.7 billion this year and by 30 per cent to Bt4.2 billion in 2009 as a result of higher freight rates and lower expenses from accounting changes.

According to the research, the company's second-quarter sales were Bt2 billion, up 20.9 per cent year on year and 0.8 per cent quarter on quarter. The soaring revenues were backed by its higher fixed-fleet capacity and increased freight rate.

In the second quarter, Precious Shipping's average freight rate was $16,500 per ship per day, up 33.8 per cent year on year and 6.6 per cent quarter on quarter.