Tonne-mile growth and congestion: Star Bulk discusses grain trade disruptions 

During an investor call on 19 February, following the Q4 financial results, Petros Pappas-led Star Bulk Carriers’ management team highlighted the potential impact of China significantly increasing its reliance on Brazil for soya bean imports, compared with the US, due to tariffs. This shift could lead to a 10-15% increase in tonne miles. Additionally, Star Bulk noted South American ports are probably less efficient than their US counterparts, a factor that could contribute to further port congestion.

In its investor presentation, Star Bulk pointed to growing uncertainty in global trade, citing the new Trump administration’s protectionist policies, tariffs and potential inefficiencies caused by geopolitical tensions.

The newly re-elected US President has already imposed a 10% tariff on Chinese imports and announced a 25% tariff on all steel and aluminum imports.

Slowing trade growth

Aside from the potential impact of imposed tariffs, Star Bulk projects 0.9% tonne-mile growth in the dry bulk trade for 2025, following a strong 5.0% increase in 2024.

The Greek owner notes iron ore tonne-miles are expected to grow by 1.0% in 2025, down from 5.3% growth in 2024. Meanwhile, in the coal trade, a 2.7% decline is projected this year, following a 6.5% increase in 2024. Lastly, grain tonne-miles are expected to rise by 2.2% in 2025, maintaining a trend similar to last year’s 2.9% growth.

Despite these subdued projections, Star Bulk remains optimistic about a market recovery from the current weak environment. The company’s chief executive, Petros Pappas, noted in the earnings report that the dry bulk orderbook remains low, with vessel prices and market conditions providing little incentive for new orders, even as the global fleet continues to age.

“We remain cautiously optimistic about the medium-term outlook for the dry bulk market,” Mr Pappas stated.

Financial performance and fleet renewal

Star Bulk, a dry bulk giant, posted strong financial results in 2024. Voyage revenues surged to US$1.3Bn, up from US$949M in the previous year. Additionally, net income rose from US$174M in 2023 to US$305M last year.

As part of its fleet renewal strategy, Star Bulk continues to offload older vessels. In its latest earnings report, the company disclosed the sale of a 2009-built Supramax, reaffirming its plan to replace less-efficient ships over time.

“We will continue to sell older and less-efficient vessels as time goes by,” Star Bulk’s management told investors.

Currently, Star Bulk owns a fleet of 155 vessels with a total capacity of 15M dwt, including under-construction tonnage.