Precious Shipping said it foresees “extreme volatility” in the dry bulk market this year and sharp rate movements. Despite the volatility, last year’s perfect balance of demand-side recovery and supply tightness due to pandemic-related inefficiencies is expected to be sustained this year, said Khalid Hashim, managing director of the Thai dry bulk operator.

“We expect more fleet inefficiencies for 2022,” he said. “This factor will tighten net effective supply of ships, aided by the very low ordering activity in 2021, to easily counteract the increased supply generated from the faster speeds that ships are expected to sail at in stronger markets.”

He noted the progressive increases in the average quarterly time charter rates last year for capes, panamaxes, supras and handies. Capes started 2021 at $16,656 and closed out the year at $19,176 on December 24 with the average for the year at $33,333.

Panamaxes started at $18,493 in the first quarter of last year and ended with an annual average of $26,898. Supras had an average time charter rate of $16,633 in the first quarter of 2021 and fetched an average of $26,768 for the year. Handies commanded an average $16,610 in the first quarter and closed last year at an annual average of $25,702.

Precious Shipping’s forecast for 2022 comes as it reported a sharp turnaround in its operations, bouncing back into the black in 2021 with a net profit of Baht4.47bn ($136.96m) from a loss of Baht1.29bn a year earlier.