Geopolitical tensions, tariffs, new environmental requirements and supply and demand determinants are potential “reefs” for the dry bulk market, according to the annual report of the listed Safe Bulkers.
The 20-F FORM published by the shipping company analyzes scenarios for the future of the sector, as well as the prospects that the company is expected to face in the coming years.
Safe Bulkers has a fleet of 46 ships, consisting of 8 panamaxes, 13 kamsarmaxes, 17 post-panamaxes and 8 capesize ships, with a total carrying capacity of 4.6 million dwt and an average age of 10.1 years.
Ιntense volatility and instability at the international level may lead to a decrease in bulker freight rates, while an oversupply of capacity in dry bulk vessels may lead to a significant drop in revenues, according to the report.
Geopolitical conflicts
Geopolitical tension remains a significant “thorn”, and in particular international hostilities such as the war between Russia and Ukraine, the fighting in the Gaza Strip and the disruption of trade in the Red Sea (including attacks on ships by Houthi rebels).
Tariffs
At the same time, the customs duties decided by Donald Trump mark a new stage in the trade war between the United States and its main trading partners.
Based on these, the listed shipping company speaks of a global risk that the supply chain is facing.
This risk affects maritime transport and may have a negative impact on freight rates and therefore on the course of dry bulk businesses.
Supply and demand
The supply and demand of maritime transport, i.e. the two factors that shape the freight market and therefore the current freight rate, are determined by many external factors.
Safe Bulkers noted that the causes affecting supply and demand are beyond its control and it may not be able to properly assess the nature, timing, direction and extent of the changes they may bring.
Nevertheless, the listed shipping company expects that future demand for dry bulk carriers will depend, among other things, on global economic growth.
Environmental regulations
Regarding environmental regulations, against the backdrop of the new regulations set by the International Maritime Organization (IMO), Safe Bulkers pointed out that the ships it manages are equipped with scrubbers (sulfur dioxide cleaning systems).
In this context – as it stated – they may face difficulties both from the price difference between the compliant VLSFO fuels (sulfur content 0.5%) and HSFO (sulfur content 3.5%) and from the lack of availability of HSFO due to regulatory restrictions.
Source: Naftemporiki
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