SET-listed Precious Shipping Plc (PSL), Thailand’s second-largest dry bulk carrier, is poised to launch its $550 million buying program for second-hand ships when shipping rates fall to 2,000 points on the Baltic Dry Index. As the company anticipates a significant supply of new ships entering the market later this year, PSL’s strategic move could potentially unlock new growth opportunities. This article examines PSL’s ship-buying program, discussing its implications for the industry and the company’s decision-making process.
The Ship-Buying Program: Timing and Strategy
PSL’s management is closely monitoring the Baltic Dry Index, a key indicator of global shipping rates, to determine the optimal time to initiate its ship-buying program. PSL’s Managing Director, Mr. Hashim, has expressed confidence that shipping rates will decline further as a substantial influx of new ships is expected later this year. However, he does not anticipate rates to reach the historic low of 660 points witnessed in December 2008.
By waiting for the rates to fall to the 2,000-level, PSL aims to capitalize on the opportunity to acquire second-hand ships aged between five and nine years at prices below $25 million each. This strategic approach will enable the company to expand its fleet while maximizing cost-efficiency.
Implications for the Shipping Industry
PSL’s ship-buying program underscores the company’s confidence in the future of the shipping industry, despite the fluctuating rates. By focusing on acquiring second-hand ships, PSL demonstrates a commitment to cost-effective growth and adaptability in an ever-changing market. As a leading player in the industry, PSL’s move could influence other shipping companies to follow suit, potentially driving further consolidation and strategic investments in the sector.
As Precious Shipping Plc prepares to launch its ambitious $550 million ship-buying program, the company’s strategic approach to fleet expansion and cost-efficiency signals a promising future in the face of fluctuating shipping rates. With its eyes on the Baltic Dry Index, PSL is poised to make a significant impact on the shipping industry and seize growth opportunities in the years to come.
