Precious Shipping’s managing director Khalid Hashim said the recovery in the dry bulk market is the real deal and that shipowners in the sector should expect a strong market in 2021 and beyond. The Bangkok-based owner said a combination of historically low fleet growth and massive global stimulus should translate into “multi-year strong ton-mile demand growth”.

Hashim’s comments come as the Thai-listed bulker owner booked a first quarter profit of $12.3m versus a loss of $3.7m a year ago. Precious reported average earnings per day, per ship during the quarter of $12,157, the highest level the company has seen in a first quarter in a decade.

Despite this, Precious said owners were still sailing their ships at reduced speeds, which assisted in tightening available supply. “2021 started with the ingredients of the perfect virtuous cycle in place with demand growth led by the Chinese stimulus of $667bn…strengthened by the $20trn monetary and fiscal stimuli enacted by the rest of the world governments to counteract the economic impact of Covid-19,” said Precious.

Typical Chinese New Year demand slowdown in the first quarter was absent due to the spike in Covid-19 cases in different parts of China resulting in the restriction of free movement during their holiday season. This combination led to the highest first quarter numbers in the last 10 years.”

Precious said the new ship orderbook to existing fleet ratio of 5.56% at the end of the first quarter was the lowest in over 20 years.

“This means that even if there is minimal scrapping, new ship supply will be insignificant while demand is expected to expand strongly and allow owners to make money over the next few years,” the company said.

Precious added: “If the supply side gets a further dividend by the recycling of the very old ships, slow steaming by the rest of the owners who are using low-sulphur fuel oil (LSFO) and forced down time in dry docks for those owners who are still running 20+ year older ships, then the market would further benefit from this tightening of available ships on the supply side.”

Precious has a 36-strong bulker fleet spread over the handy, supramax and ultramax segments.