Several factors have merged to create the perfect storm powering an “amazing” dry bulk market, and the strength will continue provided there is restrained ordering, according to owners. The market has benefited from a post-pandemic recovery, congestion, the containerized spillover into bulkers, as well as the Australia-China trade dispute, Grindrod Shipping chief executive Martyn Wade told a Capital Link webinar. He said the market had waited a decade for such good earnings and that he had 90% of his company’s fleet trading in the spot market.

Coal would be the key driver for the market over the next six months, said Safe Bulkers chief executive Polys Hajioannou, with demand prominent in India and China. This was the first time he had seen coal shortages ahead of winter in the northern hemisphere. The greatest advantage to dry bulk has been from the containerized effect, he said, adding that the recovery started with the smaller sizes and pushed up to the bigger sizes.

Seanergy’s chief executive Stamatis Tsantanis agreed, highlighting an increase in coal imports into Europe from the US. Half its cargoes were now coal versus 20% previously. However, he said he had not seen congestion playing a big role for the capesize segment in which his company operates, with faster speeds being achieved, showing how tight the market balance was. He said the dry bulk market, which was in the early stages of the current cycle, would be strong for the next three years or so. Given the patience shown by his shareholders, he is devising a dividend policy that should be announced in coming weeks.

According to John Michael Radziwill, head of GoodBulk and C Transport Maritime, the market would not be where it is today without the low orderbook numbers. “It’s hard for us to screw it up until 2023/24,” he said. He does not want to see overbuilding happening when there are plenty of opportunities in the second-hand market, with vessels generating earnings quickly amid the strong rates environment. He also does not expect the Chinese government to allow its real estate sector to collapse, insisting that infrastructure projects would continue, which would require iron ore. The containerization of cargoes was also assisting the market, although not all owners were in favor of carrying boxes on their bulkers.

Eagle Bulk’s chief executive Gary Vogel said his company had investigated carrying actual containers but decided against it given the “required significant investment” which was also based on the design of the ship. The company was still active in carrying bagged items such as cement from Asia to the Atlantic.

Mr Wade from Grindrod, which is also active in the smaller-sized segments, said it too carried bagged goods from Asia to the US Gulf. But carrying boxes was a very specific opportunistic risky trade, which carried a “big premium” but needed class approval. It was not feasible on capesizes, but more suited to handysizes. “You don’t want to make a mistake.”