Spot rates for handysize bulkers continue their upward swing with no signs of slowing down, having reached highs unseen in over a decade. The Baltic Handy Size Index (BHSI) came in at 978 points on Tuesday, up 220 points since 15 February and flirting with 1,000 points for the first time since hitting 988 points on 18 October 2018. The BHSI reached as high as 3,402 points on 23 May 2008 but then crashed to 299 points in less than six months as a result of the Great Recession that shook markets worldwide that year.

“We have been expecting a stronger market, but this is beyond our highest scenarios,” Njord Shipping chief executive Henrik Ness told TradeWinds. “We could be heading into the second-best market since the Viking Age.” The Viking Age took place during the Middle Ages from 793 to 1066 AD, when Norsemen known as Vikings undertook large-scale raiding, colonising, conquest and trading throughout Europe.

Norway-based Njord Shipping is the disponent owner of 12 handysize bulkers, five tankers and one containership. Ness said historically low orderbooks and Covid-19 should continue to sustain the handysize rally by limiting supply amid forecasts for greater demand and port infrastructure upgrades. “February normally being the weakest month of the year combined with Chinese New Year does not seem to calm charterers,” he said. “New environmental restrictions already from 2023 might lead to even less effective use of today’s tonnage leading to an even tighter situation for the existing fleet down the road.”

US president Joe Biden’s expected $1.9trn economic stimulus package and China’s fall of tonnage from the market due to the Lunar New Year are also pushing up handysize rates, said Adem Eskici, spokesman with New York-based broker Handysize Chartering Pool. Handysize owners also expect Biden’s easing of US-China tensions will boost trading of grains and other raw materials between the two nations, he said. “All these matters remind owners of 2008 market conditions and behaviors, so they are hiding tonnage positions till spot dates,” Eskici told TradeWinds. “In a few days, we have seen an increase in owners freight rates by more than 20 percent, and these conditions will keep at least till the end of the Chinese holiday.”

The remarkable rise in handysize rates has not been supported by a futures market that has been in backwardation for months and thus taken time-charter hedging off the table, Ness said. Freight-forward agreement rates for handysizes went up to $15,888 per day for March from $13,650 per day in February but then fell to $14,663 per day for April, $13,425 per day for May and $12,688 per day for June, according to the Baltic Exchange.

China’s insatiable demand for dry commodities and ban on Australian coal, however, should keep dry-bulk rates buoyant for some time, he said. Colder temperatures for this year’s winter should further support sector fundamentals, he said. “These are my current reflections, but still stunned over the last two weeks,” Ness said. “Will this increase top out?”