Precious Shipping's Rate Inflection: From Dry Bulk to Tankers, a Pivot Gains Steam
From Dry Bulk to Tankers: A Bold Diversification
Precious Shipping's second-quarter 2026 numbers were strong — net profit of THB 521.5 million ($15.87 million) and EBITDA of $30.38 million, the best quarter in at least five. But the real news is strategic. The company is no longer a pure dry bulk player. It formed a joint venture to acquire the 2013-built MR tanker High Tide (45% share) and, as CEO Khalid Hashim put it, “it looks like we've taken the right decision to go into tankers and we hope to exploit this further.” — Khalid Hashim, Chief Executive Officer · 2026-08-06 That tanker, the Tharinee Naree, was actually the best-performing vessel in the quarter by time charter rate — a striking validation of the pivot. The move is opportunistic rather than a broad mandate: “Just the fact that they earn more. So it's more beneficial to the company to have larger fleet in Ultramaxes.” — Khalid Hashim, Chief Executive Officer · 2026-08-06 Yet the timing is telling — the company is diversifying at precisely the moment when the MR tanker order book (16.5% of fleet) and an aging fleet (18.3% over 20 years) point to a sustained rate environment.
The Supply-Side Tailwind
The core of the bull case is the dry bulk supply side. Khalid walked through the charts: the order book stands at 13.18% of existing fleet while 12% of the fleet is over 20 years old, and he noted that since 2021 the order book line and the 20-year fleet line have 'got no daylight between them' — historically a precursor to strong years.
That supply discipline is amplified by the company's own fleet renewal. It sold 23 Handysize vessels and 3 small Supras while adding 9 Handysizes and 17 (target) Ultramaxes, cutting its average fleet age from 12.1 years to 11.2 and dropping grams of CO2 per tonne-mile by 56% since 2014. The order book for its own newbuilds — four Ultramaxes from Sanfu plus the tanker JV — is fully funded via a new $8.3 million EXIM facility and existing capacity.So you can see clearly that this should result in good strong earnings on this sector for some time at least in the future.
Demand side is also robust. China's dry bulk imports hit 1.4 billion metric tons in the first half, a record, with iron ore imports up 6.2% year on year and coal imports positive after a weak start. Khalid dismissed concerns about high iron ore inventories: “China buys any commodity only when prices are low and they are willing to stock it and hold it forever.” — Khalid Hashim, Chief Executive Officer · 2026-08-06 The steel export recovery is underway, with June exports of 10.3 million metric tons up from an 18-month low in January. All of this feeds directly into the charter rate outlook — the company's average time charter rate hit $16,676 per day in Q2, the strongest in five quarters, and forward FFA rates for Q4 point to ~$19,000 for Supramaxes.
Operational Edge & Legal Overhang
Precious Shipping continues to underpin its returns with cost discipline. Its operating expenses ran ~$700 per day below the industry average in the latest published data, and the company ranks top among peers on both OpEx plus G&A and EBITDA per ship ($2.3 million trailing twelve months vs. $1.9-2.2 million for peers). That efficiency is structural — the fleet renewal program has lowered fuel consumption per ship while raising average deadweight.
But there are clouds. The Mayuree Naree, a vessel lost in the Persian Gulf (the company received $10.98 million in war risk insurance proceeds), has spawned a labor court lawsuit from three crew members claiming THB 50 million in damages. The company denies any impact on financials and is defending the claim. More pressing is the Hatthaya Naree, currently anchored off Dubai with a sulfur cargo, unable to exit the Strait of Hormuz due to the Iran conflict. The vessel is on charter at $34,000/day, with war risk premiums and bunkers on charterers' account, but Khun Khalid admitted the company is exploring whether it can claim loss of hire under Restraint or Blocking & Trapping provisions. This lingering exposure to Persian Gulf instability is a reminder that diversification, while brilliant, brings new operational risks.
Yet the financial foundation is solid. The company ended Q2 with $42 million cash, a net debt-to-equity ratio of 0.73 (though net debt has risen to fund expansion), and a dividend policy of at least 25% of profit — it paid two dividends in the quarter. The ESG narrative is also strengthening: carbon-neutral certification, sustainability-linked bonds, and a top-quartile governance score. As Gautam noted, a 1993 IPO investor would have earned a 15.71% IRR through dividends alone.
The strategic pivot into tankers, the record quarter, and the clear supply-side thesis make this a name in motion. The question is whether the order book discipline holds and whether the Persian Gulf situation resolves without further legal or operational drag.