South Korea’s dominant bulk carrier Pan Ocean Co. will enlarge its fleet to 300 carriers to meet the rapidly growing bulk demand across the world.
The bulker at an investor relations event held overseas recently revealed its plan to expand its fleet to 300 vessels this year. The shipper is currently operating 293 bulk carriers after securing additional 76 vessels from January to June this year. It also plans to expand charter contracts.
Pan Ocean is chartering 191 bulk carriers, or roughly two-thirds of its fleet under operation, versus 121 chartered at the end of last year. The number of bulk carriers chartered for 1 year or longer jumped to 34 from four last year.
The bulk carrier is rapidly expanding operation to capitalize on the favorable market growth prospects.
The Baltic Dry Index, tracking average prices paid for the transport of dry bulk materials across 20 routes, reached 4,235 points last Friday, the highest in 11 years, after gaining 3.5 percent in a week. The index broke above 4,000-mark earlier this year for the first time since June 2010.
Market analysts forecast the index to extend rally amid strong demand for ferrying dry bulk commodities and shipping constraints in China due to conflict with Australia over coal trades.
“Shipping demand for bulk is expected to continue through next year as orders to build new bulk carriers have been slow in comparison with container ships,” said Choi Go-woon, analyst at Korea Investment & Securities.
Market analysts estimate Pan Ocean’s third-quarter earnings to exceed 112.0 billion won ($96.3 billion) operating income registered for the April-June period. The last time the bulk carrier made more than 100 billion won from operation was in fourth quarter 2008.
On Tuesday, Pan Ocean shares gained 0.48 percent to close at 8,310 won.