Taylor Maritime Investments (TMI) is pinning its faith in dry cargo fundamentals and slow ship speeds to support rates next year. The London-listed handysize specialist’s chief executive Ed Buttery expects earnings to stay above historical averages into 2024. “Despite macro uncertainties, we remain confident in the fundamentals of the geared dry bulk sector and are cautiously optimistic that slower operating speeds will have the effect of removing supply from the fleet as regulations come into force next year,” he added. By 2024, vessel supply growth is forecast to be at a new low, with the potential for healthy demand as economic headwinds ease, the CEO said.

TMI foresees a gradual lowering of operating speeds to reduce fuel consumption and meet IMO emissions targets. This will speed up scrapping, particularly among older handysizes, the boss believes. Asset values will in turn be supported, Buttery said. The CEO said earnings were healthy in the six months to 30 September, allowing the owner to repay $20m of its revolving credit facility. Net profit was $7.5m, down from $127.2m in 2021, when it carried out its London initial public offering.

The company does not report revenue but said total income was $11.6m against $128.9m last year, which comprised gains on financial assets at fair value. The average net time charter rate for the period was $18,858 per day, with the figure at $17,418 by the end of the quarter, a decrease of 6.5% from 31 March.The company has covered 59% of remaining fleet days for the financial year ending 31 March at $18,135 per day.

October saw an improvement in the market after the typical summer holiday lull, but this was stalled by drought conditions in the Mississippi River Basin and zero-Covid policies in China, TMI said. Non-seasonal softness in the Atlantic has begun to subside however and the owner is expecting some strength to emerge before the end of 2022.

In the Pacific, rates have shown signs of stabilizing in recent weeks as cargo and tonnage become slightly more balanced.

TMI added that, in the medium term, recently announced stimulus measures in China are expected to have a positive impact on dry bulk demand, targeting the property and construction sector and are expected to coincide with the supportive gradual easing of zero-Covid policies as the country reopens next year.

About 73% of TMI ships are currently trading in the Atlantic.