We predicted Maybulks Q2 result and market price would not be favorable sighting the BDI and Price divergence as the reason. (Click: Price-BDI divergence) Has this come true?

We believe so. Lets look at it's core Business earnings. As anticipated, the core dry bulk earning has reduced 18.5% in tandem with the 30% QoQ drop in BDI (exclude capsize). This is also inline of our observation that earnings are almost always lags behind BDI figure 1-2 quarters.



Lets look at the market price. Maybulk's price has dropped from RM1.88 when we last wrote to the current price of  RM1.69, a 10% drop. This reduction is still not as significant. we recall when the BDI was at the lowest of 650, Maybulk was at RM1.30.


 It only experience a 10% drop in price when not only BDI has came down, but also contribution from POSH dropped significantly sighting challenges in Mexico as the reason.

Again we ask the same question, is this price sustainable?



In 2013, fleet has expended by 8%, YTD, is 4.6%. If this stays it course, while demand remain steady, BDI is expected to rise further. We have not seen significant rise in scrapping rate yet.