Strong balance sheet needed for unpredictable dry bulk sector

Star Bulk Carriers Corp (SBCC) president Hamish Norton said success in the dry bulk sector depends principally on resilient finances, as the market’s inherent volatility defies forecasting.

“If you have a balance sheet that allows you to go through the cycle and not have to raise equity in distress, then you will make money, but how and when you will make money is very hard to predict,” he said.

Mr Norton was speaking to Bloomberg senior transport analyst Lee Klaskow during Bloomberg’s Fireside Chat, which took place as part of London International Shipping Week 2025.

Mr Norton explained that shifts in Chinese imports have driven much of the recent upturn. After large domestic coal stockpiles limited purchases earlier in the year, China curtailed production in the second half, prompting renewed coal imports. Grain stockpiles likewise dwindled, leading to resumed shipments.

These movements, combined with India’s thermal coal purchases, have extended average voyage lengths and boosted tonne-mile demand.

He noted port congestion amplifies effective vessel scarcity by sidelining ships during busy periods and congestion fell to normal levels in the first half of the year and has risen since, supporting freight rates by restricting available tonnage.

Looking ahead to mid-2025 and beyond, Mr Norton remained optimistic but cautious.

He anticipates continued growth in Chinese coal and grain imports, and noted emerging cargoes such as Brazilian iron ore – travelled three-times farther than Australian supplies – and expanding bauxite shipments from Guinea.

On environmental compliance, Mr Norton warned the industry faces formidable challenges in meeting 2050 emissions targets without radical measures. He observed alternative fuels such as ammonia or e-methanol will be costly and effective carbon penalties must be enforced by International Maritime Organization to make low-carbon fuels economically viable.

To improve fuel efficiency immediately, SBCC is installing ducts ahead of propellers to reduce wake and is adopting high-performance hull paints that can save up to 10% in fuel consumption.

SBCC is also trialling hull-cleaning robots and advanced voyage-optimisation software, which incorporates wind, waves and fuel prices.