Shares of Pacific Basin (02343.HK) have extended their decline, dropping more than 8%. At the time of writing, the stock is down 7.55% to HK$2.94, with a turnover of HK$26.86 million.

The Baltic Dry Index (BDI) registered 2,981 points on June 5th, marking a 7.5% decline from the previous Friday. Analysis points out that the momentum for the Panamax vessel market has weakened this week, with cooling activity observed in key trading basins. The Pacific market, significantly impacted by a reduction in Indonesian coal cargo, is seeing an increase in available vessel capacity, putting downward pressure on daily charter rates.

Further analysis highlights that due to the price inversion between domestic and imported coal in China, demand for shipping imported coal remains subdued, resulting in an overall limited volume of coal cargo available for transport. It is worth noting that previous commentary suggested that Pacific Basin's management holds an optimistic outlook for the second half of the year, primarily based on potential demand shifts from natural gas to coal. However, given that the coal substitution effect and the broader macroeconomic situation require further clarity, current forecasts for second-half freight rates are expected to be only slightly above the forward curve.