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Star Bulk |
Dry bulk shipowner Star Bulk projects that global dry bulk tonne-mile demand will grow by only 0.9% in 2025, a significant deceleration from previous years. This slowdown reflects weakening demand for coal and iron ore shipping—two pillars of the sector.
Chinese Supply Surplus Signals Lower Import Volumes
Throughout 2024, China ramped up domestic production of coal, iron ore, and grains. As a result, import demand is expected to drop in 2025. Despite Beijing's stimulus efforts in late 2024, Star Bulk believes they are insufficient to shift dry bulk trade flows meaningfully in the short term. High stockpiles and oversupply remain the key headwinds.
Additionally, Chinese dry bulk exports have surged by 19.5% over the past two years, but this increase doesn't fully offset the slowdown in inbound volumes, particularly for raw materials.
Coal Tonne-Miles Set to Contract After Record Growth
In 2024, global tonne-mile demand for coal grew by 6.5%, spurred by increased thermal electricity generation and strategic stockpiling in China. However, Star Bulk expects a 2.7% contraction in 2025, as domestic coal production outpaces consumption in recent quarters.
This shift will likely depress seaborne coal trade, especially to Asia, further impacting the Capesize and Panamax segments.
Iron Ore Imports Face Growth Ceiling Amid Inventory Buildup
Likewise, iron ore tonne-mile demand, which grew 5.3% in 2024, is projected to rise only 1% in 2025. Chinese iron ore stockpiles and domestic production have both increased significantly, curbing demand for imports.
However, Star Bulk anticipates some relief by late 2025 as new high-grade Atlantic mines begin production. These sources could eventually replace low-quality Chinese supply, thereby enhancing tonne-mile figures in the long run.
Despite the softer macro outlook, Star Bulk's financial performance remains strong. The company reported a Q4 2024 net profit of $42.4 million, compared to $39.7 million in Q4 2023. Its diverse fleet of 151 bulk carriers—including Newcastlemaxes, Capesizes, Kamsarmaxes, and Ultramaxes—positions the firm to respond dynamically to evolving global trade flows.
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