2014 freight rates likely to match average of industry

Economy February 18, 2014 00:00

By The Nation

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Precious Shipping Plc expects this year's shipping freight rates to be close to the overall average of the shipping industry following considerable volatility last year.

The Baltic Dry Index (BDI) in the first quarter was still below the industry’s average level, but it should improve after mid-year as the sector recovers.
PSL managing director Khalid Moinuddin Hashim said last year’s BDI averaged 1,206 points following the recovery of the US, European and Asian economies.
This year, PSL expects to take delivery of six new vessels to bolster its 40-vessel fleet as of December 31.
PSL expects to receive delivery of four cement vessels (one vessel each quarter) and two ULTRA vessels in July. The total purchase cost is $154 million. 
PSL hopes to have a total of 60-65 vessels by 2016. 
Meanwhile, Thoresen Thai Agencies Plc president and chief executive Chalermchai Mahagitsiri said TTA was able to effectively manage the cost structure of every business unit to achieve a high profit margin. 
In view of the growing natural gas and offshore oil survey needs and Vietnam’s business potential this year, Chalermchai said the shipping sector should continue to be positive despite the current weak baht.
Chalermchai said TTA was largely shielded by the low baht as 80 per cent of its revenue is in US dollars.
An inflow of funds from the shareholders’ capital-raising stock purchase would help TTA expand its dry bulk fleet to 30 vessels if the second-hand vessels market and investment climate for the company’s other businesses were conducive. TTA started out as a dry-bulk shipping company in 1995. 
Today, it has equity holdings in other listed firms that engage in transportation, energy, basic infrastructure – both locally and overseas – logistics and fertiliser plants in Vietnam through Baconco, coal mining in the Philippines and Indonesia, logistics and coal mining via Unique Mining Services Plc, petroleum transportation through Petrolift and port facility and operations in southern Vietnam through Baria.