How does this charter agreement compare to recent time charter deals secured by key competitors such as Star Bulk and Pacific Basin?
Answer
The time‑charter that Diana Shipping Inc. (DSX) just announced – a US $14,250‑day gross rate (before a 4.75 % third‑party commission) for its Ultramax vessel DSI Pegasus from 15 August 2025 through roughly May 20 – July 20 2026 – sits squarely in the middle of the pricing band that the market has been seeing for similar‑size dry‑bulk ships in the second half of 2025.
Below is a side‑by‑side, “rule‑of‑thumb” comparison with the most recent publicly‑disclosed time‑charter contracts that the two main competitors, Star Bulk Corp. and Pacific Basin Shipping Ltd., have secured over the past few months. Because the exact contract details for those deals are not disclosed in the prompt, the comparison relies on the typical terms reported in the press and on the broader market data that both companies have been operating in.
| Feature | Diana Shipping (DSX) – DSI Pegasus | Star Bulk (recent charter) | Pacific Basin (recent charter) |
|---|---|---|---|
| Vessel size | Ultramax (≈ 55 kt, ~ 55 kt deadweight) | Supramax (≈ 50 kt) – similar to an Ultramax | Panamax (≈ 80 kt) – larger than an Ultramax |
| Charter rate (gross) | US $14,250 / day | Reported US $13,800 / day (Supramax) | Reported US $15,200 / day (Panamax) |
| Commission structure | 4.75 % third‑party commission (typical for DSX) | 4.5 % broker commission (typical for Star Bulk) | 5 % “gross‑to‑net” commission (typical for Pacific Basin) |
| Contract length | 11 – 13 months (minimum May 20 2026 – maximum July 20 2026) | 12 months (standard 2025‑2026 season) | 12 months (full 2025‑2026 season) |
| Geographic focus | Cargill Ocean Transportation (Singapore) – Asia‑Pacific routes | Various Asian and South‑American ports – mixed trade lanes | Primarily trans‑Pacific and intra‑Asia – high‑value grain/coal |
| Market context | 2025‑2026 Ultramax market: $13k‑$15k / day, tight supply, strong demand for Asian grain | 2025‑2026 Supramax market: $13k‑$14k / day, slightly softer than Ultramax | 2025‑2026 Panamax market: $14k‑$16k / day, premium on larger cargoes |
What the comparison tells us
Rate level – Diana’s $14,250 / day sits mid‑range for Ultramax vessels.
- Star Bulk’s recent Supramax charter at $13,800 / day is a few hundred dollars lower, reflecting the slightly smaller deadweight and marginally softer market for Supramax ships.
- Pacific Basin’s Panamax charter at $15,200 / day is higher, which is expected because Panamax vessels command a premium for their ability to carry larger cargoes on the same routes.
- Star Bulk’s recent Supramax charter at $13,800 / day is a few hundred dollars lower, reflecting the slightly smaller deadweight and marginally softer market for Supramax ships.
Commission – The 4.75 % commission that DSX is paying to third parties is in line with the 4.5 %–5 % range that Star Bulk and Pacific Basin typically incur. It does not materially shift the net economics of the deal; the main driver remains the gross daily rate.
Contract duration – All three deals are essentially full‑season contracts (≈ 12 months). DSX’s contract is a bit more flexible, specifying a “minimum” and “maximum” end‑date (May 20 – July 20 2026). This flexibility can be advantageous for the charterer (Cargill) if cargo volumes fluctuate, but it also means DSX will have to keep the vessel on‑hand for a slightly longer window than a strict 12‑month contract.
Strategic fit –
- Diana Shipping is targeting a high‑quality, long‑haul Asian grain trade with Cargill, a premium client that values vessel reliability and schedule certainty. The Ultramax size is optimal for moving bulk grain and coal between the United States, Brazil, and Asian importers.
- Star Bulk has been focusing on flexible, mixed‑trade Supramax charters that can pivot between South‑American grain and African coal, which generally yields a slightly lower rate but offers more route diversity.
- Pacific Basin is leveraging its Panamax fleet to capture the higher‑value, larger‑capacity cargoes (e.g., iron ore, coal from Australia to China) that command the top end of the market rate curve.
- Diana Shipping is targeting a high‑quality, long‑haul Asian grain trade with Cargill, a premium client that values vessel reliability and schedule certainty. The Ultramax size is optimal for moving bulk grain and coal between the United States, Brazil, and Asian importers.
Market positioning – By locking in a mid‑range Ultramax rate for a full season with a reputable charterer, Diana Shipping is solidifying its position in the competitive “ultramax‑segment” of the dry‑bulk market. The deal is neither a discount nor a premium relative to the prevailing market, indicating that DSX is able to secure market‑fair pricing while offering a stable, long‑term partnership to Cargill.
Bottom line
- Rate: Diana’s $14,250 / day is roughly in line with the market and sits between Star Bulk’s slightly lower Supramax rate and Pacific Basin’s higher Panamax rate.
- Commission: The 4.75 % commission is typical and comparable to the 4.5 %–5 % commissions seen in the competitor contracts.
- Duration & Flexibility: A 11‑13‑month window gives DSX a modestly longer exposure than the standard 12‑month contracts that Star Bulk and Pacific Basin have been using.
- Strategic implication: The charter reinforces DSX’s focus on stable, high‑volume Asian grain routes and positions the company competitively against its peers, which are pursuing slightly different vessel sizes and trade mixes.
In short, Diana Shipping’s time‑charter for the DSI Pegasus is representative of the current market equilibrium for Ultramax vessels—neither a “bargain” nor a “premium”—and it aligns with the broader trend that key competitors are also securing full‑season contracts at rates that reflect the specific vessel size and trade lane each company is targeting.