Supramaxes outperform Capesizes: Eagle Bulk

Market: Agriculture, Coal
05/08/22

Demand growth for the "minor bulks" carried by Supramax dry bulk carriers is outpacing that of "major bulks" typically carried by larger Capesize bulkers, contributing to higher returns for shipowners focusing on the medium-sized segment, according to shipowner Eagle Bulk.

Minor bulk cargoes, comprised of commodities like bauxite, cement, and fertilizers, are typically smaller than the iron ore and coal cargoes loaded on to the much larger Capesize bulkers. From March 2021-March 2022, 68pc of Eagle Bulk's overall cargo mix for its fleet of 52 medium-sized vessels was comprised of minor bulk cargoes.

According to the company, superior growth fundamentals for minor bulks are "evident" as overall minor bulk demand in 2022 is expected to grow 1.1pc while demand for major bulks will decline by 0.8pc.

Eagle Bulk cited data that shows demand for iron ore, coal and grain, the trade-driving "major bulks" of the dry bulk market, are projected to decline by 0.5pc, 0.3pc and 2.8pc, respectively, in 2022. Meanwhile, demand for minor bulks such as "agribulks", or agricultural products other than grain, "forest products" such as lumber, and aluminum base material bauxite is projected to grow in 2022 by 1.1pc, 1.3pc, and 7.9pc, respectively.

"This is the primary reason Supramaxes have been the best performing asset class this year, outpacing Capesizes by $8,000/day even though they're one-third the size and cost about 40pc less," the company said.

The average time charter equivalent (TCE) rate in the second quarter for Eagle Bulk rose to $30,207/d, up from $21,580/d a year earlier. The increase was attributed by Eagle Bulk to shifting grain and coal trade routes because of the war in Ukraine increasing ton mileage for dry bulkers, which was positive for fleet utilization and, "in turn, supportive of rates".

Profit in the quarter rose to $94.4m, assisted by the sale of a 2004-built Supramax for $15.8m, up from the prior year's much lower $9.2m profit after the company purchased two 2015 scrubber-fitted for $44m. Along with the sale of the Supramax, profits rose in the quarter as a result of the competitiveness of Supramax and Ultramax bulkers compared with other segments of the dry bulk industry.

By Ross Griffith

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

16/01/25

Brazil to face weaker La Nina conditions

Sao Paulo, 16 January (Argus) — Many government agencies expect a weaker La Nina weather pattern in Brazil — partially because of its delayed start — that could help reverse damages from a previous droughtand boost hydroelectric power generation. La Nina conditions emerged a month later than expected, starting only in January, according to national meteorology institute Inmet. Its presence was confirmed by the US' National Oceanic and Atmospheric Administration (NOAA) and is 40pc likely to last until March-May. Delayed La Nina conditions and its weaker effects on Brazil's climate may be linked to the global average temperature hitting an all-time high in 2024 , according to the World Meteorological Organization. La Nina conditions develop when the surface waters in the tropical Pacific Ocean are cooler-than-average across the central and central-eastern regions. But global oceans have been running much warmer for more than a year, which could have delayed the phenomena, according to NOAA. Its usually causes heavier rains in Brazil's northern and northeastern regions, while central-southern states experience drier weather and heatwaves. Brazil, along with South America as a whole, has a history of droughts , agricultural losses , and higher ethanol prices in previous La Nina seasons, but the effects this year will be milder and potentially beneficial to industries in some regions. Agriculture Despite its conditions set to last throughout the first quarter of 2025, Brazil's 2024-25 crop is expected to hit a record 322.3mn metric tonnes (t), up from 297.8mn t in the previous crop, according to national supply company Conab. Still, most forecasts rely on previous favorable conditions during the development of the 2024-25 crop. The soybean crop is set to be 13pc higher than in 2023-24, reaching 166.33mn t. Corn also is expected to increase production, reaching 119.6mn, a 3.3pc rise from the previous crop. But previous dry weather and low precipitation harmed center-southern sugarcane producers, which are responsible for 91pc of the national sugarcane output. The 2024-25 sugarcane crop is forecast to reach 678.7mn t, a 4.8pc decline from the previous season, according to Conab. La Nina's conditions may recover some of the sugarcane crop this season. Northeastern sugarcane production, harmed by last year's drought, will face a period of heavy rains brought by the phenomenon in January. But the sugarcane crop is already projected to decline by 30pc from the previous crop regardless, according to northeastern sugarcane producers' association Unida. The last time La Nina hit Brazil, in 2020-23, roughly 40pc of the main center-south sugarcane crop was at risk from dry weather . Ethanol Ethanol production is set to increase by 1.3pc in 2024-25 from the previous season, according to Conab. Still, sugarcane ethanol is outlined to shrink by 2.8pc thanks to 2024's dry weather and wildfires in the southeast. Electricity La Nina's late arrival enabled the summer rainy period in Brazil. The main hydroelectric reservoirs recovered from last year's drought and will end this month above half of their capacity, according to national grid operator ONS. Regardless of La Nina's presence, most of the central-southern states are expected to have above-average rains in January-April, according to Inmet. Temperatures are also set to stay above the historical average in the central-western, southeastern, southern and northern states. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Tariff war is a lose-lose proposition: Canada

15/01/25

News

15/01/25

Tariff war is a lose-lose proposition: Canada

Calgary, 15 January (Argus) — Any retaliation by Canada to tariffs imposed by the US would be designed to apply political pressure, the country's energy minister said today in Washington, DC, but a potential tariff war between the two countries is a lose-lose proposition. "We are not interested in something that escalates," Canada's minister of energy and natural resources Jonathan Wilkinson said in a panel discussion at the Woodrow Wilson Center. But until tariffs are imposed, Canada does not know how it will need to respond. Canada will likely focus on goods that are "important to American producers," but also those for which Canada has an alternative. "The point in the response is to apply political pressure," said Wilkinson, who advocated for stronger trade ties between the two countries byway of energy and critical minerals. US president-elect Donald Trump plans to impose a 25pc tariff on all imports from both Canada and Mexico when he takes office on 20 January. So far he has not signaled any plans to exempt any goods, including oil and gas. Alberta's premier Danielle Smith and now Wilkinson are promoting the flow of more crude to ensure North America's energy security. "We can enhance the flow of Canadian crude oil from Alberta," said Wilkinson by boosting capacity on pipelines like Enbridge's 3.1mn b/d Mainline crude export system. "The US cannot be energy dominant without Canadian energy." The incoming administration would be open to such pipeline expansions, said Heather Reams, president of Washington-based non-profit Citizens for Responsible Energy Solutions. "It's something that the Trump administration and Republican members in Congress would be interested in revisiting to ensure that there is a steady flow of the energy that's needed to fuel our mutual economies," Reams said on the panel. Enbridge's Mainline moves Canadian crude from Alberta to the US Midcontinent, where Wilkinson expects consumers will be faced with higher gasoline prices — adding as much as 75¢/USG at the pump — should tariffs be imposed. Americans could also see higher food prices if tariffs are put on potash, a fertilizer mined in Saskatchewan and used by US farmers, she said. Development of critical minerals like germanium, gallium and others should be pursued further to minimize the US' exposure and dependence on China, according to Wilkinson, echoing comments made by Ontario premier Doug Ford on 13 January in his own appeal to enhancing trade ties with the US. "We cannot be in a position where China can simply manipulate the market," said Wilkinson, citing that country's dumping of nickel. "We should form a true energy and minerals alliance." By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Brazil's Bndes grants R480mn to ethanol producer

14/01/25

News

14/01/25

Brazil's Bndes grants R480mn to ethanol producer

Sao Paulo, 14 January (Argus) — Brazil's Bndes development bank approved R480mn ($79mn) for sugar and ethanol producer CMAA to increase biofuel production in the state of Minas Gerais. The bank will grant R220mn from its Climate Fund to raise the private-sector company's anhydrous ethanol output in its Vale do Pontal sugar and ethanol unit, in Limeira do Oeste city, by around 1,470 b/d. The plant will be able to produce up to 3,650 b/d. With new investments, the Vale do Pontal plant will process 4mn metric tonnes (t) of sugarcane/crop, up from 2.7mn t/crop previously, producing hydrous ethanol, raw sugar and electric power for the Brazilian domestic market. The Climate Fund will be also used to double CMAA's power generation to 68MW. The remaining R260mn will be taken from Bndes' services and machinery program to modernize existing equipment and buy new agricultural machines. CMAA's Vale do Pontal, Vale do Tijuco and Canapolis units are expected to use R50mn, R160mn and R50mn, respectively. These resources can be allocated to buy, sell or produce machines, industrial systems or technological and automation goods, as well as hiring national services and machine imports, Bndes said. The company will also be able to increase issuance of Cbio carbon credits, following the rise in ethanol output. By Maria Albuquerque Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

WTO asks EU again to adjust RED II delegated act

13/01/25

News

13/01/25

WTO asks EU again to adjust RED II delegated act

London, 13 January (Argus) — A World Trade Organisation (WTO) panel found that the EU must amend the delegated act for the 2018 renewable energy directive (RED II) in the multi-year dispute with Indonesia on oil crop-based feedstock restrictions. Indonesia raised the dispute in December 2019 , arguing that RED II violated WTO rules by discriminating against oil crop-based biofuels from Indonesia compared with oil crop-based biofuels from the EU. The dispute centred around the EU classification of palm oil and palm oil-based biodiesel at a high risk of indirect land-use change (Iluc). Malaysia raised a similar case against the EU in January 2021, and the dispute was heard by the same panel as the Indonesian case. The panel found in March that the EU had to amend elements of the RED II delegated act. The WTO upheld that the EU crop cap and high indirect Iluc cap and phase-out requirements under RED II are not violating international obligations. But the WTO also found that the EU has violated agreements by not conducting a timely review of the data used to determine Iluc risk and failing to design the low Iluc-risk criteria to prevent arbitrary discrimination between countries which have the same conditions. The EU also did not comply with notification procedures or organise a commenting process, the panel found. The WTO recommended that the EU bring its measures into conformity with its international treaty obligations. Indonesia also challenged the French palm oil feedstock ban. The WTO also agreed that the French ban violates the general agreement on tariffs and trade by applying internal taxes to imported palm-based biofuels but not to domestic rapeseed and soybean-based biofuels, despite being substitutable products. The EU responded that it intends to take the necessary steps to amend the delegated act for the renewable energy directive to align with WTO rules. The panel report can be appealed for 60 days after publication, when it then should be adopted by the WTO dispute settlement body. The parties then agree on a reasonable time frame for the EU to comply with its obligations. In the EU response, it was unclear what measures may be taken to amend the French system to align with the WTO ruling. By Simone Burgin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

India's coal output hits all-time high in 2024

13/01/25

News

13/01/25

India's coal output hits all-time high in 2024

Singapore, 13 January (Argus) — India's coal production hit an all-time high last year, led by an uptick in utility demand and a broader government push to boost domestic output. Combined coal output from domestic sources such as state-controlled Coal India (CIL), Singareni Collieries (SCCL) and captive blocks reached 1.04bn t in calendar year 2024, up by 7pc or 70.4mn t from a year earlier, according to Argus calculations based on coal ministry data. This supported overall supplies, including supplies to utilities and the non-power sector, which reached 1.01bn t, from 950.2mn t in 2023. The steady increase in domestic coal output and supplies was also led by demand from utilities, as the country's coal-fired generation rose last year, and generators continued to replenish stocks to meet the rising power demand. The strong output also followed India's broader goal to raise local coal production, with an aim to trim imports and meet its broader energy security objective. Delhi has been pushing CIL to ramp up its output, while also seeking higher production from blocks allocated to utilities and the non-power sector. The growth in production and supplies likely weighed on thermal coal imports in 2024, with seaborne receipts estimated to have dropped last year, a first annual decline since 2021. The dip in India's demand for seaborne cargoes in a well-supplied market was reflected in recent prices, with the GAR 4,200 kcal/kg market for geared Supramaxes falling to a 44-month low of $49.43/t fob Kalimantan on 27 December, the last assessment of 2024. The market eased further to $49.25/t fob Kalimantan on 10 January. Output mix Production at state-controlled CIL stood at 785.2mn t in calendar year 2024, up from 756.1mn t a year earlier, while its supplies totalled 757.4mn t in the 12-month period, up from 738.6mn t in 2023, according to Argus calculations based on the company's monthly output data. State-owned SCCL produced 67.12mn t in 2024, down by 4pc or 2.5mn t in 2023, the coal ministry data showed. But this was more than offset by steady growth in coal production at captive coal blocks allocated to industrial coal consumers, state-government mining companies and some utilities. Coal output from the captive blocks rose to about 187mn t last year, up from 143.3mn t in 2023, the data showed. The higher captive coal production followed an increase in production from coal blocks allocated to state-controlled utility NTPC , which aims to become one of India's biggest coal producers in coming years. India's policy to auction coal mines for commercial mining by private companies is also beginning to support the overall captive coal output. Supply mix Combined domestic coal supplies to utilities from CIL, SCCL and captive blocks reached 831.44mn t, up by 6pc from a year earlier, the coal ministry data showed. India's coal-fired generation — which meets most of its power requirements — reached 1,293.19TWh last year, up by 5pc from a year earlier, the Central Electricity Authority (CEA) data show. Overall domestic coal supplies to non-power consumers such as steel and cement totalled about 179mn t last year, up by 13pc from 2023, according to the coal ministry data. Supplies to captive power units fall under non-power sector as per the data. By Saurabh Chaturvedi India's coal suppy mix (mn t) India's coal output mix (mn t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more