Pacific Basin Shipping is facing a harsh year at its core dry-cargo division, with average charter rates lower this year than last as a glut of new tonnage outpaces growth in cargo demand.
Chief operating officer Jan Rindbo said: 'We expect dry bulk rates to be weaker in 2012. It will be a tough year for our dry bulk business.'
The firm operated an average of 148 dry cargo ships in the first half of the year, of which about 100 were Handysize ships of between 25,000 and 38,000 deadweight tonnes (dwt).
Average daily earnings from the Handysize fleet fell 23 per cent year on year, although average rates were still 38 per cent higher than the market spot rates between January and June, he said.
Rindbo said the 'ongoing challenge is too much capacity'. Dry cargo vessels totalling 139 million dwt are scheduled for delivery this year out of a total dry bulk order book over at least the next three years of 164 million dwt.
'On the demand side, the signals are still relatively good,' Rindbo said. He said the firm saw a 22 per cent increase in the volume of minor bulk cargoes such as fertiliser going into China in the first half of this year.