Tariff wars between the US and China lie behind an unusually slow start to 2019 for dry bulk owners but the slump is not a significant worry, a top US dry bulk chief executive said today.

A dearth of soybean cargoes from the US Gulf to Asia, primarily to China, has made for a particularly weak January, according to Gary Vogel, chief executive of New York-listed Eagle Bulk Shipping.

Speaking with TradeWinds on the sidelines of the annual Noble Capital investor conference in Fort Lauderdale, Florida, Vogel explained the trend and why it shouldn’t be a major concern.

“Typically January is a weak month with China being slow prior to the Chinese new year, and it’s usually the Atlantic market that keeps the overall market from falling too much," Vogel said.

“This year the Atlantic has come down, too, and it’s primarily been driven by a lack of soybean exports from the US Gulf to China in January.”

There has been a recent stirring, with a half dozen such cargoes fixed in the past week, but it’s not enough, he said.

“That pales in comparison with typical demand,” Vogel said.

“The trade from the US Gulf to China also represents significant tonne-mile demand so the impact is even greater than looking at an absolute tonnage number.

“However, I’m not particularly worked up because the supply-demand fundamentals in the supramax and ultramax markets are still compelling, especially in the ultramax trade.”

The broader dry cargo market typically recovers from a slow spell following the Chinese new year, “and most people are looking at that as the next inflection point," Vogel said.

Smaller bulkers typically are boosted by the volume of soybeans coming from Latin America in the mid-second quarter, he said.

“Having said that, this is not a typical year," Vogel added.

"If there’s an agreement between the US and China, we could see significant soybean movements in February or March, which is atypical,” he said.

One thing that should have little impact on Eagle is last week’s Vale-owned dam break in Brazil, which is threatening iron-ore exports and further stressing the broader market, particularly capesize bulkers.

“It’s tragic in that it’s a human disaster,” Vogel said. “But we don't move iron ore from Brazil and very little iron ore overall, so there shouldn’t be a business impact.”