Grain trade outlook may boost Star Bulk’s vessel demand

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Nov. 26 2019, Updated 10:48 p.m. ET

Grain trade expected to increase

Grain is a commodity that is carried mostly by Panamax and Supermax vessels. According to Clarksons, world grain exports are expected to increase by 3% this crop season versus 2013 levels.

In the second half of 2014, grain trade is expected to improve due to increased U.S. exports supported by positive U.S. and Canadian harvests after two years of poor crops. The grain trade in the second half of 2014 will most likely be supported by European union exports, which will boost the Panamax/Supramax market following weak Argentinian exports in the second quarter of 2014.

Grain trade

Star Bulk’s second half 2014 outlook

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During the second half of 2014, Star Bulk Carrier Corp (SBLK) might experience a combination of healthy U.S. exports, delayed South American exports, and possibly the last of Ukrainian (resin) exports ahead of a potential political tension escalation. If the estimated scenario is correct, the Panamax and Supermax will enjoy increased exports during the same period and thereby significantly boost vessel demand.

This market scenario will benefit industry companies like Diana Shipping Inc. (DSX), Knightsbridge Shipping Ltd (VLCCF), Navios Maritime Holdings (NM), Eagle Bulk Shipping Inc. (EGLE), and the broader industry index Guggenheim Shipping exchange-traded fund (or ETF) (SEA).

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