Golden Ocean, the Norwegian dry bulk owner, is expecting a “sustained period of firm rates” based on steady demand and low fleet supply. Although the global recovery from the Covid pandemic faces challenges, with revisions downwards in many countries, some of the forecasts are still higher by historical standards and the company is positive on the outlook for dry bulk demand.

Even with lowered economic growth forecasts, global tonne-mile demand is forecast to increase by 2.1% this year and 2.7% in 2023, the company, owned by billionaire John Fredriksen, said. New efficiency rules due to enter into force on January 1 will have a “significant effect” on the fleet, it said, adding that any vessel built before 2014 will have limited options to meet the standards apart from cutting sailing speeds, with the further potential for early retirement. The orderbook is at a 30-year low, which supports the positive supply dynamics, according to a statement.

After growing by 3.8% in 2020 and by about 4.2% per year on average over the last decade, the global dry bulk fleet is forecast to grow by 3.6% in 2022 and just 2.2% in 2023, well below organic replacement levels, it said. Depending on the impact of the new IMO standards, fleet growth may slow even further as more than 17% of the vessels in the global fleet are 15 years of age or older and may no longer be commercially viable, it added. Very few new vessels have been ordered given high steel prices and limited yard capacity. That has led to newbuilding prices for capesizes and panamaxes rising to the highest since 2009.

The company posted net income of $125.3m for the three months ending March 31, compared with $23.6m in the year-earlier period. It declared a dividend of $0.50 per share. “Golden Ocean delivered another strong quarter on the back of a firm panamax market and a high degree of contract coverage for our capesize fleet secured at attractive levels last year,” chief executive Ulrik Andersen said in a statement. “With the anticipated strengthening of the freight market in the second half of the year, we expect to generate significant cash flows.”

The company has signed a $275m loan agreement to refinance 14 capesizes, with the new facility expected to improve cash breakeven rates for those vessels by about $1,500 per day.