Struggling Torm hit by tough markets

Torm continued to struggle with the financially difficult situation in the third quarter. The shipping company recognized a loss of USD 78 million before taxes, compared to a USD 70 million loss in the same period last year, according to the company’s financial statements for the third quarter.

Torm writes that the freight rates for the product tanker segment were seasonally low in the third quarter. In the West, MR freight rates were negatively affected by planned refinery maintenance and limited transatlantic arbitrage. In the East, the freight rates for LR2 and LR1 vessels were supported by e.g. jet fuel cargoes from the Arabian Gulf to Brazil and the naphtha trade in general. The LR1 and LR2 freight rates also benefited from distillate arbitrage from the Middle East to the West. The MR freight rates in the East were positively impacted by imbalances within the Asia-Pacific region.

The freight rates in all bulk segments suffered in the third quarter of 2012 as the US grain harvest was affected by drought giving the lowest yield in six years. The Pacific spot market struggled as expected due to slower Indian activity during the monsoon season and the partly enforced commodity export ban by the Indonesian authorities.

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