U-Ming Marine Transport Corp (裕民航運), a bulk shipper and member of Far Eastern Group (遠東集團), is upbeat about the bulk shipping business in the coming quarters on expectations of a recovery in the global economy, a rise in iron ore production and an expansion of grain exports from the US, the company said yesterday.
U-Ming reported net profit of NT$345.81 million (US$12.43 million) for the first quarter of this year, or earnings per share of NT$0.41, compared with a net loss of NT$384 million in the same period of last year.
Revenue increased 47 percent year-on-year to NT$3.6 billion for the first four months of the year, company data showed.
Photo: Wang Yi-hung, Taipei Times
The company’s revenue growth could be attributed to the rising Baltic Dry Index (BDI), which reflects the daily price of moving goods such as coal, rice and wheat along routes deemed representative of the global market, U-Ming spokesperson Bismark Chang (張宗良) told an online investors’ conference in Taipei.
“As 70 percent of our fleet deliver as a spot charter, the rising BDI has a positive correlation with our revenue,” Chang said.
The BDI typically falls quite low in the first quarter, which is the slow season for bulk shipping, but not this year, Chang said, adding that the BDI last quarter hovered between 1,500 and 2,500, up from 500 to 1,000 in the first quarter of last year and in 2019.
On the spot market, the four-month average spot freight rate for a capesize vessel climbed 279 percent year-on-year to NT$29,229 as of the end of last month, while the rate for Panamax vessels rose 172 percent to NT$21,423 and the rate for Supramax vessels rose 190 percent to NT$21,091, Chang said.
At the end of last month, the BDI hit 3,053 — the highest in 11 years — and U-Ming expects the index to maintain its momentum as the global economy recovers thanks to countries rolling out their COVID-19 vaccination programs, he said.
Strong exports of soybeans and corn from the US, and grains from Brazil and Argentina in the first quarter also led to growth in the index, Chang said.
Global demand for steel this year is expected to increase 4.1 percent, after a decline of 2.4 percent last year, and major miners expect to see a stable rise in iron ore production, so U-Ming expects strong demand for iron ore transport this year, he said.
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