Hong Kong-based bulk carrier Pacific Basin Shipping Ltd said on Wednesday that a recent slide in ocean bulk freight rates was seasonal and predicted prices would recover in autumn, when trade traditionally picks up. But the operator of a "Handysize" fleet of smaller bulk carriers is also averaging out its revenues by taking longer-term orders to prepare itself for any possible market downturn, said Chief Executive Mark Harris.
Nobody really knows whether dry bulk freight rates have peaked, he told reporters.
"But, I think, they will be at high levels and that will continue to provide shipping companies with very good profits," he told reporters.
Pacific Basin, like many shipping firms around the world, benefited from a global trade boom led by strong Chinese demand and saw its profit more than quadruple in 2004.
Its shares have fallen nearly 12 percent in the past three months to HK$3.60 on concerns over falling freight rates.
The benchmark Baltic Exchange Dry Bulk Index fell to 2,995 points on Tuesday, more than 50 percent below its peak of 6,208 last December.
Freight prices for minerals fell to 21-month lows on Tuesday as China's steel mills deferred fresh iron ore imports to stop prices in the overheated industry from sagging further.
Recent movements on the Baltic index, which tracks dry bulk freight rates on main trade routes, were similar to last year's trend which saw the index falling from February to 2,622 in June before spiking back up, he said.