FRESH from doubling its 2024 net profit to $41.3m on a 16% rise in average charter rates to $12,700 per day, Thailand-based minor bulks player Precious Shipping said the dry bulk market needs to beware of “looming economic shoals in 2025”.

Pointing to the glaring issue of an impending tariff war and its impact on trade, Precious said in its annual review that US-China trade tensions may not lead to greater investment and export gains for the Association of Southeast Asian Nations bloc as happened during the previous Trump administration.

“The outlook is far more uncertain this time around, likely weighing on foreign investment in quarters to come,” the company said. 

It remained confident of strong consumer spending in most of Asia, as more stable prices and gentle interest rate cuts — outside of Japan— will help sustain domestic demand.

The resilient Asian economies, combined with additional factors such as sustained Chinese demand for coal, would support the dry bulk market, Precious added.

Coal and iron ore is seen as being in continued demand by China, which imports 75% of global supply of the latter, and also being sourced from more far flung sources that may add to tonne-mile demand.

Coal demand will be driven by new trends such as AI, electric vehicles and Bitcoin, which will all increase power requirements and the resulting demand for power generation from coal-fired power plants.

The operator of mainly supramaxes and handys also pointed to four sectors of the China economy that would drive demand for steel and which it sees as the “single most important factor on the demand side for the dry bulk markets”. 

In addition to the bread-and-butter real estate market, steel demand is seen coming from infrastructure, steel exports, shipyards and EV manufacturers, all of which could potentially benefit the minor bulk carriers in which they are predominantly shipped.

Precious said steel exports from China, amounting to 111.1m tonnes in 2024, had been particularly beneficial for geared vessels.

This was balanced against a “truncated supply of new ships” for the next few years, Precious said. 

It noted the overall fleet stood in a relatively good position with fleet growth of 3.3% in 2024 and an existing orderbook that amounts to 10.6% of the fleet at the start of 2025.

Precious said in the geared segment, net fleet growth was 4.8% in 2024 in the handy/supra/ultra segments. An existing orderbook of just 4.1% of the fleet is expected to reduce supply-side pressure.

Meanwhile, Precious also saw a positive outlook on the supply side. In the supra/ultramax sector, 11.8% of the existing tonnage is scheduled for delivery up to end of 2028, while 16.4% will be more than 20 years old and likely to be scrapped.

In the handysize sector, the respective numbers are 9.7% and 23.8%, making the segment an even more compelling proposition.