World Bunkering > News > Industry News > Bunker prices hit Green Reefers

Norwegian refrigerated cargo specialist Green Reefers says increase costs were the main reason why voyage related expenses rose by US$7.3m in Q2, pushing the company into the red with an operating result before depreciation (EBITDA) of minus US$5.4. The company operates a fleet of 43 ships, including chartered tonnage.

The bunker price hike exacerbated the effects of a poor reefer market. Green Reefers says in it half-year report: “The development for the conventional reefer fleet continued to be very disappointing in second quarter 2010. Spot rates fell below last year, and no significant peak season materialised.”

It adds: “The results are influenced by high bunker prices, and the increased costs have mainly been carried by the operators without being transported on, as should normally happen in the spot market.”

The company says that average spot market rates for the first half of 2010 are 10% lower than the same period last year.

It comments: “The expectations for market improvements in 2010 have so far not come true, and we are facing the lowest spot rates for many years. The low rates can be explained by a combination of several factors occurring simultaneously; reduced banana harvest, import ban from Russia for US poultry, financial challenges in the Euro-zone and in Russia, and less fishing activities in both South Atlantic and South Pacific. The question is whether there is reason to believe that all these circumstances will take place in the same time in the future?”

On a more optimistic  not the company says: “As a consequence of the low spot market scrapping has been on a record high level. Twenty-seven vessels have been scrapped during the first half year. This corresponds to five percent of the total specialized reefer capacity and is expected to lead to a better balance between demand and supply.”