|
10.10.2024
|
|
The Supramax dry bulk market experienced unusually low volatility, marking a departure from the typical seasonal fluctuations seen during this period. The Baltic Supramax index started the quarter at 15,237 USD/day and ended the quarter down 892 USD to end at 14,345 USD/day. Due to weakening Atlantic fundamentals, the front haul rates experienced a particularly challenging quarter.
A key factor holding back the Supramax market was the softening Panamax rates, as many cargoes that would typically be handled by Supramax vessels were instead taken up by cheaper Panamax vessels, particularly in the Atlantic. Key contributing factors to the weak Panamax rates were low congestion levels and shorter distances traveled with weaker long haul Brazilian grain exports.
While overall freight rates remain relatively high, supported by geopolitical factors that are maintaining ton-mile demand, the outlook is increasingly uncertain. Weaker soybean demand from China and sluggish European industrial activity has kept the Atlantic market from gaining its usual momentum where it typically outperforms the Pacific significantly in Q4. Consequently, the group has reduced its outright long exposure and is tactically managing its Atlantic fleet to recover costs from earlier backhaul voyages, while maintaining exposure to a potential late upturn in the Atlantic, which historically peaks mid-December. The group's overall position going into Q4 is thus flat to short, reflecting the bearish sentiment.
Following the appointment of Torbjørn as CEO from 1st of September, an initiative has been established to improve competitiveness. As part of this, the organization has been fine-tuned to lower the Group's cost base. This is expected to lower the company's general and administration costs (G&A) by about 3 mUSD to about 22 mUSD annually starting from 2025.
The Board of Directors has decided not to declare a dividend for Q3-24. Any dividend for the fourth quarter of 2024 will be announced in February 2025 together with publication of the second half year report.
Western Bulk, press release
