Yesterday, the FFA curve noted a positive shift after a period of negative development, with contracts up 10% for November, 11% for December and 1.4% for 2022. In our view, the shift was a welcome relief from the recent negative sentiment in the sector which was extended by today’s 5.9% decline in Capesize spot rates – with a 3.0% and 4.6% decline to Panamax and Supramax spot rates as well.

However, we remain positive to the underlying fundamentals and view the recent sell-off as a buying opportunity given the companies’ attractive pricing and strong dividend potential. For Golden Ocean, we estimate a dividend potential of cUSD2/share for H2 2021 – resembling 45% annualized dividend yield on latest close, and 25% and 28% yield for 2022 and 2023, respectively.