Western Bulk better

A gain on the sale of its charter claims against Pan Ocean has helped Western Bulk to an improved second quarter performance.

Oslo-listed Western Bulk booked an adjusted profit of $15.8m in the quarter, beating the $6.9m seen at this stage in 2013.

Without the one-off income, the bulker operator’s figures were still stronger than they were a year ago.

Its profit of $7.5m compared to the $1.5m deficit in the second period of 2013 as its shipowing division booked a smaller loss.

Western Bulk said: “The optional vessels gave a good contribution to the Net TC in the first half of the quarter, but declining rate levels throughout the quarter reduced the margin to zero from these vessels in the second half of the quarter.”

It explains the supramax market averaged $7,000 daily in the quarter with very little volatility.

It followed a disappointing South American grain season, some of which the owner says was due to poor economic conditions in Argentina and the government's continued intervention in agriculture exports by setting quotas and raising taxes in an attempt to control domestic inflation of food products.

The Pacific basin was stronger, but still trended down. This was due to an Indonesian ban on exports and dramatically lower coal shipments into China following the April announcement that 2,000 small and ineffective coal mines be closed by the end of the year, Western Bulk said.

“Consequently, these mines are now running at full capacity to maximize stockpiles before closure, leading to this temporary reduction in imports of coal,” its quarterly report explained.

“Being a mainly panamax trade this had a negative knock on effect for supramaxes as competition rose on trades where the two vessel classes are substitutes, such as the South American grain exports.”

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