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MOL warns of China slowdown impact on dry bulk profits

A cut in full-year forecast for the panamax and minor bulks segment was blamed squarely on a ‘slowdown in cargo movements due to the economic downturn in China and loose supply and demand balance’. Profit forecast from capesizes was cut slightly because of seasonal factors in the fourth quarter

The key Japanese operator is the latest to warn of the negative impact of a slowdown in the Chinese economy on the dry bulk sector

MAJOR Japanese owner MOL is the latest to warn of the negative impact of a slowdown in the Chinese economy on the dry bulk sector.

In its third-quarter financial report, MOL cut the FY2024 profit forecast for the dry bulk business by Yen4bn ($25.9m) to Yen14bn. This is expected to be Yen23.2bn lower than the Yen37.2bn posted in FY2023.

MOL revised the full-year forecast for the capesize segment slightly downward due to seasonal factors in the fourth quarter.

In the panamax and minor bulks segment, however, the cut in the full-year forecast was blamed squarely on a “slowdown in cargo movements due to the economic downturn in China and loose supply and demand balance”. 

This weakness, however, is expected to be offset by a good performance in the energy business, which saw its full-year profit forecast raised by Yen4bn to Yen104bn. As a result, MOL’s overall full-year net profit forecast has been raised by Yen50bn to Yen400bn.

MOL expects stable profit contributions from long-term contracts in crude oil tankers and product tankers to be underpinned by a firm market due to the limited delivery of new vessels. 

The line also allayed concerns about the tanker business due to the extension of production cuts by Opec-plus and a decrease in China’s imports because of its faltering economy.

Meanwhile, MOL’s liquefied gas transport business is expected to benefit from the delivery of new vessels and stable profit from existing long-term contracts and projects. Profit was revised upwards as a result.

 

 

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