Diana Shipping Secures Extended Charter for Newcastlemax Vessel

NYK Line to Charter 206,104 dwt Los Angeles at Increased Rates, Generating $12.43M in Revenue

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New York-listed Greek bulk carrier operator Diana Shipping has secured an extension for the time charter contract with Nippon Yusen Kabushiki Kaisha (NYK Line) for one of its newcastlemax vessels. The extension highlights the strategic importance of large bulk carriers in global trade and underscores the growing demand for shipping capacity amidst fluctuating market conditions.

NYK Line has chartered the 2012-built, 206,104 dwt newcastlemax bulker Los Angeles at a gross charter rate of $28,700, minus a 5% commission paid to third parties. The charter period extends until a minimum of October 1, 2025, and up to a maximum of December 15, 2025. This arrangement signifies a substantial increase from the current day rate of $17,700, reflecting the bullish market sentiments and the rising demand for bulk transportation.

The new charter is expected to commence on July 18, seamlessly continuing from the current contract. Diana Shipping anticipates that the employment of the Los Angeles will generate approximately $12.43 million in gross revenue for the minimum scheduled period of the time charter. This financial injection is poised to strengthen Diana Shipping’s revenue stream and enhance its market position amidst a dynamic shipping environment.

The extension of the charter contract comes at a time when Diana Shipping is streamlining its fleet composition. Following the previously announced sale of the Houston bulker, Diana Shipping’s fleet will comprise 38 dry bulk vessels. This includes four newcastlemaxes, eight capesizes, five post-panamaxes, six kamsarmaxes, six panamaxes, and nine ultramaxes. The diverse fleet enables Diana Shipping to cater to a wide range of cargo demands, thereby optimizing its operational efficiency and market reach.

Diana Shipping’s strategic fleet expansion is further underscored by its plans to acquire two methanol dual-fuel new-building kamsarmax dry bulk vessels. These vessels are expected to be delivered in the second half of 2027 and the first half of 2028, respectively. The incorporation of methanol dual-fuel technology aligns with the global maritime industry’s shift towards sustainable and environmentally friendly practices. This move not only enhances Diana Shipping’s environmental credentials but also positions it at the forefront of the industry’s green transition.

As of now, the combined carrying capacity of Diana Shipping’s fleet, including the Houston and excluding the two vessels yet to be delivered, stands at approximately 4.4 million dwt with a weighted average age of 10.92 years. This substantial carrying capacity underscores the company’s capability to handle significant cargo volumes, thereby catering to the burgeoning global demand for dry bulk transportation.

The extension of the charter contract with NYK Line is reflective of a broader trend in the maritime logistics industry where long-term charters are becoming increasingly common. This trend is driven by the need for stability and predictability in an otherwise volatile market. By securing long-term charters, shipping companies can ensure a steady revenue stream, which is crucial for financial planning and operational stability.

Historically, the maritime logistics sector has seen periods of fluctuating demand and rates. For instance, the Baltic Dry Index (BDI), which tracks the rates for shipping bulk commodities, has experienced significant volatility over the years. During periods of high demand, such as the commodities boom in the early 2000s, shipping rates surged, providing windfall profits for operators. Conversely, during downturns, such as the global financial crisis of 2008, rates plummeted, leading to financial strain for many shipping companies. The current extension by Diana Shipping can be seen as a strategic move to capitalize on favorable market conditions while mitigating the risks associated with market volatility.

The extension of the charter contract between Diana Shipping and NYK Line for the newcastlemax vessel Los Angeles is a testament to the robust demand for bulk carriers and the strategic foresight of Diana Shipping in securing long-term revenue streams. As the maritime industry continues to navigate through economic uncertainties and environmental challenges, such strategic decisions will play a crucial role in shaping the future trajectory of global trade and logistics.

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