Japanese shipping company Nippon Yusen is expected to report close to zero pretax profit for the year ended last month, roughly in line with its forecast, as sluggish demand for car transport was offset by a recovery in the sea freight market.

The pretax figure represents a sizable drop from the 60 billion yen ($547 million) profit logged a year earlier. Sales likely fell roughly 16% to about 1.9 trillion yen, close to the company’s projections.

Still, the results would have been worse had shipping rates for vessels such as dry bulk carriers and containerships not rebounded.

The benchmark Baltic Dry Index hit 1,297 in late March, up roughly 336 points from the end of December. Freight prices were solid for everything from large capesize bulk carriers to smaller handysize bulkers.

Nippon Yusen’s bulk carrier rates were apparently higher than anticipated, thanks to strength in the Chinese economy. Rising Chinese steel production helped push up demand for transporting iron ore and coal. Shipping demand grew especially for Brazilian coal, which is known for its lower environmental impact, helping Nippon Yusen improve rates for its bulk carriers.

For its containerships, sea freight rates as well as shipment quantities are beginning to recover, owing to solid demand on routes to North America and Europe. Customers seemed more accepting of price hikes, possibly learning from the bankruptcy of a major South Korean shipping company in 2016, which caused confusion for many companies.

Meanwhile, automobile transport declined due to an economic slowdown in resource-rich nations like Saudi Arabia that were hurt by falling oil prices. Due to its already-narrow profit margins, declines in car shipments tend to take a quick toll on earnings.

Nippon Yusen booked losses, such as write-downs on its containerships, in October, and will likely log a net loss of about 250 billion yen for fiscal 2016, a result close to its forecast. Results will be released April 28.

Source: Nikkei