Thailand’s Precious Shipping and China’s Taizhou Sanfu Ship Engineering have buried the hatchet and are working on a bulker newbuildings project.
Industry sources said Bangkok-based Precious has contracted the Chinese shipbuilding company to build four 64,000-dwt bulk carriers.
The deal marked the two companies’ first co-operation in seven years after the Thai shipowner lost a legal suit against the shipyard over fuel consumption issues on ultramax bulkers built by the yard.
It is also the company’s first newbuilding contract in 10 years. Precious last ordered newbuildings in 2014 when it struck a deal with Sainty Marine for a dozen 64,000-dwt bulkers.
Precious’ managing director Khalid Hashim confirmed the order of the ultramax bulkers at Taizhou Sanfu with whom the company has old and good relations.
“The thinking behind these orders is to renew our fleet which has resulted in us selling our smaller, older, and ships with mechanical engines, and to replace them with larger, eco engine powered ships, thereby reducing our overall age profile and reducing the overall carbon footprint of our fleet,” Hashim said.
In a regulatory disclosure to the Thailand Stock Exchange, Precious said it is paying a total of $133.4m, or $33.36m each, for the new ultramax bulkers.
It is scheduled to take delivery of the quartet between March 2026 and January 2027.
In 2017, Precious lost an arbitration tribunal against Taizhou Sanfu in London over promised fuel savings for two 64,000-dwt bulker newbuildings.
The shipowner had claimed damages after alleging that two new ultramaxes consumed excessive amounts of bunkers.
As it was on the losing side, Precious was ordered to pay back $32m in loans from the yard plus legal fees.
Last month, Precious reported that the company saw a near five-fold increase in its first-quarter net profit on the back of improved freight rates.
It reported a net income for January to March of 2024 of $11.4m versus the $2.3m achieved 12 months earlier.
Precious attributed the year-on-year increase in vessel operating costs to a combination of higher dry-docking and special survey expenses, together with the depreciation of the Thai baht against the US dollar.
The shipping company said its ultramax bulkers earned an average daily rate of $14,218 against $10,671 a year ago, while its supramax vessels earned an average daily rate of $13,417 versus $9,842 in the first quarter of 2023.
Daily operating costs per ship were $5,379, higher than the shipowner’s target of $5,200 for the year, and higher than the year-ago figure of $5,231 per ship.
During the first quarter of this year, Precious disposed of two older ships — the 53,857-dwt Wikanda Naree (built 2013) and 28,500-dwt Rattana Naree (built 2002) — and acquired a younger vessel through the secondhand market.
It bought Interlink Maritime’s 40,000-dwt Interlink Amenity (built 2018) for $25.25m and renamed it the Hansa Naree.
Precious Shipping currently has a fleet of 37 vessels on the water.
