Handysize Market Spot Rates (BHSI) | Supramax Market Spot Rates (BSI) | |||||||||||
US$/day net* | 38k dwt (tonnage adjusted^) | US$/day net* | 58k dwt | |||||||||
35,000 | 35,000 | |||||||||||
30,000 | 30,000 | |||||||||||
25,000 | 25,000 | |||||||||||
20,000 | 20,000 | |||||||||||
15,000 | 15,000 | $13,300 | FFA Average* | |||||||||
$11,390 | FFA Average* | $13,040 | ||||||||||
$11,360 | ||||||||||||
10,000 | 10,000 | |||||||||||
5,000 | 5,000 | |||||||||||
- | - | Jan | Feb Mar | Apr May | Jun Jul Aug | Sep | Oct Nov | Dec | ||||
Jan | Feb Mar Apr May Jun | Jul Aug Sep Oct Nov Dec | ||||||||||
2016-2020 | 2022 | 2023 | 2024 | 2024 (FFA) |
Data as at 11 October 2024
- Excludes 5% commission
- Spot market rates adjusted downward to reflect expected actual earnings given our average deadweight tonnage of our Core Handysize fleet is lower than the Baltic Exchange benchmark Source: Baltic Exchange
2016-2020 | 2021 | 2022 | 2023 | 2024 | ||||
Mill tonnes
180
160
140
120
100
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
- Main drivers of increased YoY loadings of minor bulk include bauxite, agribulks and fertilisers in 3Q24
- 3Q24 record bauxite loadings from Guinea - mostly carried in Capesize and Panamax vessels
- Chinese steel exports have increased 21% YoY from Jan - Sep 2024
- 3Q24 largest detractors included ores & concentrates and aggregates
55
50
45
40
35
30
Jan | Feb | Mar | Apr May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
- Increased YoY grain loadings from Argentina, United States and Ukraine in 3Q24
- In 3Q24, Argentinian grain loadings increased by 51% YoY, recovering from crop yields that were previously affected by drought
- Ukraine 3Q24 loadings increased 367% YoY
- 3Q24 Brazilian grain loadings decreased by 8% YoY
130
120
110
100
90
80
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
- 3Q24 Chinese seaborne coal imports increased despite significant domestic coal production and higher hydroelectric output
- Coal demand in China, India and Vietnam is expected to remain robust due to energy security concerns
- China's 3Q24 import of Australian coal increased by 24% YoY, supporting tonne- mile demand, while loadings from Russia decreased YoY by 30%
160
150
140
130
120
110
100
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
- In 3Q24, Brazilian iron ore loadings increased 3% YoY, positively impacting tonne-mile demand
- China's housing construction remains muted, the loss in steel demand is being offset by growth in infrastructure and manufacturing sectors, as well as excess steel production supporting record exports
Source: Indicative loading data and material from Oceanbolt, all rights reserved. Data as at 14 October 2024, subject to revision
Handysize Core Business TCE
US$/day
20,000 Reversal of Handysize freight tax provision of US$11.6 million resulted in TCE +US$1,690/day in 4Q23
15,000 | $13,740 | ||
$12,530 | $12,770 | $12,570 | $12,570# |
$11,050 | # | |||||||
10,000 | $10,200 | $10,170 | ||||||
74% | 19% | |||||||
5,000 | of | of | ||||||
days | days | |||||||
0 | ||||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 4Q24 | 1Q25 | |
Indicative Core Fleet P&L Breakeven Level incl. G&A for 1H24 = US$9,780
Supramax Core Business TCE
US$/day | Reversal of Supramax freight tax provision | |||||||||||||
of US$11.1 million resulted in TCE | ||||||||||||||
20,000 | +US$2,150/day in 4Q23 | |||||||||||||
$16,430 | ||||||||||||||
15,000 | $13,760 | $13,610 | $13,780 | $12,220 | # | $12,590# | ||||||||
$11,540 | $12,190 | |||||||||||||
10,000 | ||||||||||||||
84% | 29% | |||||||||||||
5,000 | of | of | ||||||||||||
days | days | |||||||||||||
0 | ||||||||||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 4Q24 | 1Q25 | |||||||
Indicative Core Fleet P&L Breakeven Level incl. G&A for 1H24 = US$11,030
Daily TCE earnings in 3Q 2024:
- Handysize: US$13,740, up 35% YoY
- Supramax: US$12,220, up 6% YoY
4Q 2024 Cover:
- Handysize: 74% of days covered at US$12,570
- Supramax: 84% of days covered at US$12,190
1Q 2025 Cover:
- Handysize: 19% of days covered at US$10,170
- Supramax: 29% of days covered at US$12,590
Reversal of freight tax provisions:
- In Q4 2024, we expect to reverse Handysize and Supramax freight tax provisions from prior periods, positively impacting TCE earnings, though subject to certain conditions and adjustments, and anticipated to be less than the 2023 reversal
4Q 2024 FFA rates : | 1Q 2025 FFA rates : | ||
▪ | Handysize: $11,390 | ▪ | Handysize: $9,510 |
▪ | Supramax: $13,040 | ▪ | Supramax: $11,080 |
- As at 11 October 2024, indicative TCE rates only as voyages are still in progress;
Current values of scrubber benefits are approximately US$20 and US$380 per day across our Core Handysize and Supramax fleet respectively. When a vessel with a scrubber is assigned a cargo, its TCE rate may be higher due to the added benefit of the scrubber
^ Source: Baltic Exchange, data as at 11 October 2024, exclude 5% commission and Handysize FFA rates are tonnage adjusted
Core Business
Operating Activity
Handysize Performance vs Index (BHSI)*
US$/day
Scrubber contribution Relative performance
1,130 | 2,040 | |||||||||
540 | ||||||||||
2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | |
22 | 22 | 22 | 23 | 23 | 23 | 23 | 24 | 24 | 24 |
- In 3Q24, we outperformed the average Handysize (BHSI 38k dwt tonnage-adjusted) index* by US$2,040 or 17% per day
- Outperformance will be negatively impacted in an upwardly moving freight rate environment
- In 3Q24, scrubbers fitted to our four core Handysize vessels contributed US$40 per day to outperformance
Supramax Performance vs Index (BSI)*
US$/day
Scrubber contribution Relative performance
1,300 | ||||||||||
(480) | (1,600) | |||||||||
2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | |
22 | 22 | 22 | 23 | 23 | 23 | 23 | 24 | 24 | 24 |
- In 3Q24, we underperformed the average Supramax (BSI 58k dwt) index* by US$1,600 or 12% per day
- Supramax vessel outperformance affected by high-costshort-term chartered vessels
- Outperformance will be negatively impacted in an upwardly moving freight rate environment
- In 3Q24, scrubbers fitted to our 33 core Supramax vessels contributed US$460 per day to outperformance
Operating Activity Margin
US$/day
Margin
1,300 | ||||||||||||||||||||
510 | 580 | |||||||||||||||||||
2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | |||||||||||
22 | 22 | 22 | 23 | 23 | 23 | 23 | 24 | 24 | 24 |
- In 3Q24, our Operating activity generated a margin of US$1,300 per day, an increase of 12% YoY
- Over 6,950 operating days in 3Q24, an increase of 2% YoY (3Q23: 6,810 days)
- We currently operate approximately 154 short-term chartered vessels, with a focus to increase operating days on a year-on-year basis
*Excludes 5% commission / BHSI 38,000 dwt (tonnage adjusted) / BSI 58,000 dwt
- From 25 April to 31 December (both days inclusive)
- Any shares bought back by the Company will be cancelled
- Proactively repurchasing our own shares at a significant discount compared to the intrinsic value of our assets, we currently recognise it as a more advantageous strategy compared to acquiring second-hand vessels
- Reflects our confidence in dry bulks long-term prospects
Share Buyback Progress | ||
Purchased | Since Commencement | 3Q24 |
No. of shares (approx.) (million) | 105.8 | 54.9 |
Total consideration (approx.) (US$ million) | 31.7 | 14.5 |
Progress based on US$ consideration | 79% | 36% |
Average share price (HK$) | 2.34 | 2.06 |
2024F Dry Bulk Trade Volumes YOY
Million Tonnes | Coal | 1,326 | 0.8% | ||||||
Iron Ore | 1,590 | 3.0% | |||||||
Total (Iron Ore + Coal) | 2,916 | 2.0% | |||||||
Bauxite / Alumina | 213 | 7.6% | |||||||
Soybean | 177 | 6.0% | |||||||
Coke & Petcoke | 106 | 5.0% | |||||||
Forest Products | 331 | 4.4% | |||||||
Wheat / Grains | 371 | 4.2% | |||||||
Focus | Steel Products | 389 | 3.2% | ||||||
Manganese Ore | 46 | 2.2% | |||||||
Agribulks | 197 | 2.1% | |||||||
Fertiliser | 197 | 2.1% | |||||||
PB | Salt | 55 | 1.9% | ||||||
Sugar | 65 | 1.6% | |||||||
Others | 138 | 0.7% | |||||||
Stone & Aggregate | -1.2% | 163 | |||||||
Scrap Steel | -2.2% | 91 | |||||||
Cement | -2.2% | 136 | |||||||
Copper Concentrates | -2.6% | 38 | |||||||
Nickel Ore -5.9% | 48 | ||||||||
PB focus cargo | 2,761 | 2.7% | |||||||
Total Dry Bulk | 5,677 | 2.3% |
(tonne-mile effect = 4.4%)
(minor bulk tonne-mile effect = 3.6%)
2025F Dry Bulk Trade Volumes YOY
Million Tonnes | Coal | -1.3% | 1,309 | ||||||
Iron Ore | -0.9% | 1,576 | |||||||
Total (Iron Ore + Coal) | -1.1% | 2,885 | |||||||
Cement | 146 | 7.4% | |||||||
Manganese Ore | 49 | 6.5% | |||||||
Salt | 58 | 5.5% | |||||||
Copper Concentrates | 40 | 5.3% | |||||||
Others | 145 | 5.1% | |||||||
Focus | Bauxite / Alumina | 223 | 4.7% | ||||||
Nickel Ore | 50 | 4.2% | |||||||
Coke & Petcoke | 110 | 3.8% | |||||||
Soybean | 182 | 2.8% | |||||||
PB | Agribulks | 202 | 2.5% | ||||||
Fertiliser | 202 | 2.5% | |||||||
Scrap Steel | 93 | 2.2% | |||||||
Wheat / Grains | 379 | 2.2% | |||||||
Forest Products | 338 | 2.1% | |||||||
Stone & Aggregate | 166 | 1.8% | |||||||
Steel Products | 395 | 1.5% | |||||||
Sugar | 65 | 0.0% | |||||||
PB focus cargo | 2,843 | 3.0% | |||||||
Total Dry Bulk | 5,728 | 0.9% |
(tonne-mile effect = 0.7%)
(minor bulk tonne-mile effect = 2.4%)
We anticipate ongoing disruption to Suez Canal transit, impacting fleet efficiency and increasing tonne-mile demand
- Minor Bulk: Broad-based increased demand for minor bulks including cement and clinker, metals and ores, agribulks, fertiliser and steel
- Forecast indicates a rise in bauxite production from Guinea, with the majority of exports destined for China
- Iron Ore: Reduced Chinese domestic housing construction is expected to limit iron ore demand for steel production
- Coal: Expect demand to be driven by energy security concerns in China, India and Vietnam
- Grains: Climate changes are expected to continue to affect domestic crop output which may lead to increased grain trade volumes
- Rising global demand for diversified diets and protein will continue to stimulate import demand for feed grains and soybeans
Source: Clarksons Research, data as at September 2024
Handysize / Supramax Supply Development | Overall Dry Bulk Supply Development | ||||
% of Total Fleet | % of Total Fleet | ||||
5% | 5% | ||||
4.2% | 4.1% | |||||||||
4% | 4% | |||||||||
3.5% | 3.6% | |||||||||
2.9% | 3.2% | 3.1% | 3.1% | |||||||
3% | 2.9% | |||||||||
3% | ||||||||||
2.8% | ||||||||||
2% | 2% | |||||||||
1% | 1% | |||||||||
0% | 0% | |||||||||
-1% | -1% | |||||||||
2021 | 2022 | 2023 | 2024F | 2025F | 2021 | 2022 | 2023 | 2024F | 2025F |
Scrapping Forecast | Deliveries Forecast | Scrapping Forecast | Deliveries Forecast | |||
Scrapping | New Deliveries | |||||
Scrapping | New Deliveries | |||||
Net Fleet Growth | Net Fleet Growth | |
- Forecast dry bulk net fleet growth of 3.1% in 2024 and 2.8% in 2025
- Forecast total dry bulk fleet scrapping of 0.4% and 0.6% in 2024 and 2025
- Forecast Handysize and Supramax fleet scrapping of 0.4% and 0.5% in 2024 and 2025
- The global fleet of Handysize and Supramax vessels in which we specialise is forecast to grow by 4.2% net in 2024 and 4.1% net in 2025
- Compliance with emissions regulations (e.g. EEXI, CII) will likely further reduce dry bulk supply through slower speeds, scrapping and greater energy-saving technology retrofit time
Source: Clarksons Research, data as at September 2024