Regulatory doubts see Pacific Basin change course

HONG Kong-listed minor-bulk specialist Pacific Basin Shipping has simplified some orders for newbuildings by abandoning dual-fuel specifications in light of uncertainty surrounding global marine emissions framework.

The company says it has agreed with Nihon Shipyard Co. and Mitsui & Co. to terminate orders placed in November 2024 for the construction of four 64,000 dwt dual-fuel Ultramax newbuilding vessels.

Replacing these terminated commitments, PacBasin has simultaneously entered into new agreements with the same shipyards to purchase four conventionally-fuelled 64,000 dwt Ultramaxes of the latest fuel-efficient design for an aggregate consideration of US$156.8 million (US$39.2 million each) and with expected delivery between 2028 and mid-2029.

The agreement with Mitsui & Co. includes an option to acquire two 64,000 dwt dual-fuel (methanol/fuel oil) Ultramaxes vessels, exercisable by the end of February 2027, for a total consideration of US$91 million (US$45.5 million each) and with expected delivery between April 2030 and March 2031.

Unconnected with the above, PacBasin has placed orders with Jiangmen Nanyang Ship Engineering Co., Ltd. ("JNS”) to order two 40,000 dwt Handysize newbuilding vessels for a total consideration of USD59.6 million (US$29.8 million each) and with expected delivery in the second half of 2028.

The vessels have been contracted on substantially the same terms and will share the same latest, fuel-efficient, open-hatch and logs-fitted design as the four Handysize newbuildings that the company ordered and announced on 23 December 2025.

“Converting our order for four dual-fuel Ultramax newbuildings to conventionally-fuelled vessels reduces unnecessary near-term capital expenditure and is a financially prudent response to renewed uncertainty around the timing and final shape of a global regulatory framework to drive the maritime green fuel transition following the failure to adopt IMO’s previously agreed Net-Zero Framework in October 2025 amid political divisions between member states,” CEO Martin Fruergaard said.

“While we expect a NZF-type global mechanism to be adopted in some form in due course and we remain committed to our decarbonisation journey, we believe it is in our shareholders’ best interests to avoid near‑term investment in higher‑cost dual-fuel vessels until clearer regulatory support emerges.

“The option to acquire two dual-fuel methanol newbuildings preserves our flexibility to re-enter that market at the appropriate time, while we continue to invest in energy-efficiency measures and position ourselves for priority access to alternative fuels and prepare for new and tighter greenhouse gas regulations ahead,” he said.

Simultaneously release Q1 2026 results, reported “continued outperformance in a volatile market”.

“In the first quarter of 2026, our core business generated average Handysize and Supramax daily TCE earnings of US$12,130 and US$13,970 per day, representing a year-on-year increase of 11% and 14% respectively, and outperforming the BHSI (tonnage-adjusted) and BSI spot market indices by US$1,030 and US$2,050 per day respectively in the period.

“Freight rates in the first quarter of 2026 were healthy and stronger than in the same period last year. The outbreak of war at the end of February added disruptions to the market, causing volatility in freight rates since March 2026,” PacBasin said.