In an effort to force owners and operators to comply with the ballast water management convention the US Coastguard is cracking down on its ballast water management extension programme and will not grant any extensions past 2021. It has also adopted more stringent requirements for granting extensions.

Owners and operators looking to trade in US waters will now have to prove that a ship cannot comply with the regulations, and to justify why it needs an extension. They will also need to provide proof of how they intend to comply with the regulation in future – either by planning to install a type approved system at a later date, or by working with a manufacturer on a system that is going to get type approval.

“If owners do not show us why they can’t comply we’re going to deny the extension,” USCG director of regulations and standards Jeffrey Lantz told an industry audience at CMA 2017. Mr Lantz said he doubted the USCG would grant any extensions past 2021. The USCG will not even consider extension requests for 2019 and 2020 for another 18 months. Requests for extensions up to December 31, 2018 will still be considered, he said. The USCG would consider ‘mini’ extensions of up to six months to owners that can provide a basis for why the vessel cannot comply, but do not provide any information on how they intend to comply.

Mr Lantz acknowledged that no single system can fit all vessel types, but said the USCG expects owners and operators to take advantage of engineering and operational solutions and make modifications to vessels, and to communicate how they intend to get it done. “We know that in all cases, right now, because of the shortages of type approved systems there may be not be one that fits the type of ship. But we ask owners to look ahead to see how they can comply at a future date. We will pay particular attention to those owners and operators who can demonstrate matching the ship’s operating profile to USCG type approved systems.”

Existing compliance extensions dates will remain valid, Mr Lantz said. However, the USCG will no longer grant extensions for vessels that can install alternative management systems – those with IMO type approval. The exception being owners that can prove there is no AMS for their vessel which could be granted a five-year extension. “We figured that is one method or way to comply with our regulations and the industry needs to take advantage of that,” Mr Lantz said.

The US has to date received over 13,600 extension requests and granted over 11,500. Some 300 requests have been denied due to a lack of type approved systems available. Since the new policy was introduced on March 6, the USCG has granted 97 extension requests and denied 244.

The USCG is also ramping up compliance and enforcement in the field and has been working with field officers to better educate them informally about the regulations, alongside developing a formal enforcement guide. “We are committed to smooth implementation of the ballast water management regulations and to finding reasonable and practical solutions for facilitating compliance,” Mr Lantz said. “We encourage owners and operators to work with their flag state and class societies. And the treatment manufactures; it is critical that that dialogue can take place.”

The USCG approved its first ballast water management system in December 2016. There are currently three type approved systems with a fourth going through final stage of review.

Expectations that fortunes will improve in the bulk carrier sector this year are supported by an IHS Markit analysis, which concluded that the outlook provides owners with a “great opportunity to go long”.

IHS Markit principal trade analyst Luciana Salles predicted that 2017 will be a transitional year for the bulker market as demand rebounds, vessel deliveries slow as compared with previous years’ boom, and vessel scrapping gathers pace, leading to three years of growth.

Market balance will be achieved through the double action of higher demand globally and particularly from China’s increasing imports of iron ore and coal during from 2017–20, the analysis said.

Growth in grain exports from the Atlantic Basin was seen pushing up tonne-miles further for the bulker sector as populations, principally in the Pacific Basin, also grow, fuelling further demand.

Global growth was expected to firm up during 2017, reaching 2.8% this year, from 2.5% in 2016. Both GDP and industrial production were seen increasing 3%, and exports up 4%, pushing dry bulk growth up on average by 2.5%/year over the three-year period.

According to IHS Markit analysis, Beijing’s supply-side reform has targeted a reduction of 500 million tonnes of coal mine capacity within 3–5 years, of which 250 million tonnes shut down last year. In addition, China has targeted a reduction of 100-150 million tonnes of steel production capacity by 2020.

However, Salles believes that of the 45 million tonnes of production capacity reportedly closed last year, just half actually ceased trading, as the vast majority of the so-called of eliminated capacity had already been closed down or idled.

Even with these efforts to reduce capacity, China’s steel production still increased by 10 million tonnes last year, reaching 808 million tonnes, which is a 1% year-on-year (y/y) increase.

Amid curbing policies and expected stronger demand ahead, Chinese steel prices rose, helping to boost Australian and Brazilian imports, which both increased 8% y/y in 2016, with a further increase expected in 2017.

Grain growth is also expected to support overall demand for dry cargoes, even though coal is expected to face continued challenges from alternative energy sources.

Over the next three years, net bulker fleet growth will stand at just 1% but capacity will increase 14 million dwt in 2017, growth of 1.8%, before declining in the two subsequent years, the analysis found.

About 10% of the current fleet, 70 million tonnes in total, is currently on order, with about half of those vessels, an aggregate 34 million tonnes, in the Capesize sector.

However, Salles pointed out that scrapping will be limited, given the age profile of the bulker fleet, in which about 88% of ships are 15 years old or younger. That means opportunities for scrapping – due to the high cost of meeting regulations, such as the Ballast Water Management Convention and the sulphur cap – will be limited to a small segment of the total fleet.

Nevertheless, balance could be achieved through a more disciplined approach to capacity and a boost in seaborne trade, causing a positive effect on timecharter rates, which are set to increase by about 50% y/y.

Broken down into four key segments, IHS Markit data forecast that Capesize vessels will see yearly average timecharter rates rise from USD7,374/day to USD11,000/day on the Baltic Exchange’s 5TC scale.

Similarly, Panamax 4TC and Supramax 6TC rates are both expected to average about USD8,500/day, which would represent a significant rise over 2016 figures. Steady increases are expected on all three scales through to 2020, by which time rates are expected to have doubled from 2016 average daily rates for all vessel types.

The three-year outlook for the dry bulk sector looks positive, with the supply/demand balance pushing freight rates up to more sustainable levels.

What happens after 2020 could well depend on how disciplined owners are during this period of relative profit. Some brokers have reported rumours that bulker owners are already asking yards about newbuildings.

Yard prices at rock bottom and overcapacity in the shipbuilding market are luring owners to the low prices. However, a new bout of ordering could kill the market’s rebound and lead to another period of depression.

The bulk carrier DL Marigold was ordered from both New Zealand and Fijian waters earlier this month for being an invasive species threat. The vessel’s hull is now being cleaned by a team of divers from New Zealand in international waters off Fiji.

“Offshore locations are not ideal,” says Dr Rob Hilliard, biofouling consultant and principle at Intermarine Consulting. “Presumably it was considered the best option in this case by DL Marigold’s operators given its cargo constraints and distance to alternative ports where the fouling poses a lower, acceptable biosecurity threat.”

High seas hull cleaning for biosecurity purposes is costly and prone to delays, says Hilliard. Mobilizing and progress can be slowed by a range of logistics, safety and efficiency issues including:
* securing a fit-for-purpose diving platform for remote deep sea operations
* mobilizing time to prepare and load the diving, cleaning and treatment spreads, including sufficient spares for remote work
* the additional fuel, victualling and voyaging time to reach and remain on location
* managing operations beside an unanchorable ship (including DP vessels because spinning propellers pose unacceptable risks to divers and their umbilicals)
* altering surge conditions within the effective lee, as shifting winds, wave climate and currents continuously interact with the vessel’s drift behavior (wind vaning, roll, yaw)
“Even in anchorages, water forces alongside hulls can readily exceed diver, brush kart and ROV capability,” says Hilliard.
“Speed of any high seas cleaning is at the mercy of wind and waves, as well as being governed by ship niche complexity (sea chest interiors, thruster tunnel, rope guards, rudder pintle aperture etc) versus the suitability of the diving team’s platform, experience and equipment that was mobilized,” says Hilliard.

New Zealand authorities ordered the Panama-registered DL Marigold to leave after its divers discovered dense fouling of barnacles and tube worms on the ship’s hull.

It was the first time an international ship has been ordered to leave a New Zealand port because of biofouling. From May next year, new rules will require all international vessels arriving in New Zealand to have a clean hull. During the interim period, the nation’s Ministry for Primary Industries can take action in cases of severe biofouling.

The DL Marigold arrived in Tauranga, New Zealand, from Indonesia on March 4 to unload palm kernel, and would have been in New Zealand waters for nine days. On being ordered to leave, the vessel was sailed to Fiji for hull cleaning. However, Fiji’s Biosecurity Authority released a statement saying it would also refuse entry to the DL Marigold, citing similar concerns that the ship could introduce invasive species into its waters.

Meanwhile, New Zealand has released an explanatory pamphlet for ship agents and operators, outlining their interim policy before the new regulations enter into force. The pamphlet is available here.

THE dry bulk downturn has been declared officially over for now and US-listed firms are back in expansion mode. During this week’s Capital Link event, many dry bulk executives were bullish based on the perception of improved supply-demand fundamentals.

Underlining the confidence were the recent acquisitions made by Eagle Bulk and Golden Ocean (news, data), while some of their peers, including Euroseas and DryShips, have also stated their intent to expand their fleets.

The optimism comes as the Baltic Dry Index rose to 1,205 points on Monday, the highest in around four months, but still far below previous peaks seen during the two upcycles earlier this decade of no less than 2,000 points.

Secondhand prices for a five-year-old capesize vessel have increased 34.7% over the past year to $32m, panamax prices have risen by 34.6% to $17.5m and handymax prices by 33.3% to $16m, according to Clarksons data, but these values are still low by historical standards.

“We think this is the beginning of market recovery,” Genco Shipping & Trading president John Wodensmith told Lloyd’s List. “It is still the time to expand and grow.”

China’s coal and iron imports have continued to show healthy growth so far this year, while shipments of minor bulks and grains also remained healthy, according to some executives.

Looking further ahead, the brightening outlook for global economic growth has infused market participants with greater confidence.

“Demand will… just blow over everything on the supply side,” Scorpio Bulkers (news, data) president Robert Bugbee said. “Customers are across the board” for time charters, indicating confidence in the market for the next couple of years, he added.

Oversupply worries have also eased, with the size of the global orderbook shrinking on a lack of newbuilding orders. According to Lloyd’s List Intelligence, the capesize orderbook accounted for 2.7% of the existing fleet as of March 9 this year when vessels above 200,000 dwt were excluded, compared with the year-ago level of 7.3%. The portion of the kamsarmax orderbook fell to 11.4% from 21.6%, while that for handymaxes dropped to 9.8% from 18.8%.

However, with secondhand prices nearing newbuilding prices after recent increases, some executives expressed concerns over any resumption in newbuilding orders — which would end the upcycle prematurely. “Every single time we have a down cycle it is because of over-ordering,” said Mr Wodensmith.

In 2012-2013, private equity firms flooded the market with bulker newbuildings, leading to the severe oversupply that eventually pushed freight rates down to record lows last year. As for whether the dry bulk spectrum would once again experience another ordering spree, opinions were mixed. Some noted tight bank lending and limited downside in newbuilding prices would curb newbuilding deals. “There is scarcity of capital,” Euroseas chairman and chief executive Aristides Pittas said.

Mr Bugbee, who noted that discussions over the next cycle could be premature, said: “When market comes up, capital will come in. No lesson will be learned. We are just off to another great cycle in shipping.”

The introduction of mass flow meters (MFM) for bunker operation in Singapore is a welcome development. Unfortunately it appears that although the equipment has changed, the behaviour of some unscrupulous suppliers has not.

The main objective of supplying bunkers through the MFM was to avoid discrepancies in the quantity of bunker supply.

It has been reported that piping irregularities were discovered on bunker tankers. One implication of such piping fixture irregularities may be that they allow some quantity of bunkers to be siphoned back into the bunker tanker tanks whilst bunkering is in progress. This would mean that the amount registered on the Mass Flow Meter (MFM) total is greater than that delivered to the vessel, with the vessel receiving less than that recorded. Piping fixtures form an integral part of the MFM system, as specified in the Technical Reference for Bunker Mass Flow Metering (TR48). One of the roles of the bunker surveyor is to check the integrity of this system.

Since 1 January 2017, the figure on the Bunker Delivery Note (BDN) presented to the vessel is the figure obtained from the MFM. Bunker barges do not accept figures derived after calculating quantity received on board from soundings, nor do they participate in the sounding process.

Soundings should still be taken on board before and after bunker delivery and, in case of a difference between the vessel figures and the BDN, letters of protest should be issued. Bunker suppliers will not usually accept these letters of protest or will refuse to sign. But in the event of a dispute, they are evidence to show a difference between the MFM figure and the figure obtained by the sounding method. Charterers should be informed of any difference immediately.

The use of a reputable bunker surveyor who can inspect the bunker barge lines for any irregularities in addition to cross checking the seal verification report, inspecting the seals and taking MFM readings, is recommended.

Dry-bulk shipping executives see broad-based commodity demand, not just China’s ongoing need for iron and coal, as helping improve freight rates across the industry.

Second-hand prices are improving, and that’s driving up the risk for a new round of newbuild ordering.

During a panel at the Capital Link International Shipping Forum in New York, Scorpio Bulkers president Robet Bugbee said the dry bulk industry has gone from “awful to really awful to not as bad” as commodity demand showed more strength than was predicted. “All of us in the market underestimated real, physical demand growth” for commodities, Bugbee said.

China’s economic growth remains the industry’s main driver and, in Bugbee’s opinion, “China is doing great.” The higher living standard of Chinese citizens is driving stricter environmental rules, which means a shift to higher quality iron and coal from overseas sources. Speaking of the move to cleaner air, Bugbee quipped that China “is hiring more people from the US EPA (Environmental Protection Agency).”

But Aristides Pittas, chief executive of Euroseas, says there is still risk in China due to policy moves. For examples, China limited operating days for domestic mines, but the resulting price increase for coal could sway Chinese leaders to reverse course. “Government policy affects the industry,” Pittas said. “China’s leaders could change their mind when prices go up,”

Mats Berglund, chief executive of Pacific Basin, agrees that Atlantic Basin coal demand appears strong. But he also says minor bulks, which account for half of overall demand, are also strong. “Grain demand is being driven by increased urbanisation,” Berglund said. “There is also good demand for cement and construction materials into North America.” But Berglund still worries about ship supply may respond quickly to better demand. Slow steaming, in particular, is helping limit supply. Operators could decide to operate at faster speeds, which would drive up supply.

Bugbee agrees slow steaming helped improve the supply side, as did vessel lay-ups and scrapping. But the length of time it will take a newbuild to hit the market means rates have more potential to increase. While Scorpio is “not in the market to order,” Bugbee said a newbuild today would not be delivered until late 2018 or early 2019. “We cannot add much to supply quickly,” Bugbee said.

Asked about risks in the market, Genco Shipping and Trading chief executive John Wobensmith says “new capital inflows” as second-hand ship prices get closer to newbuild prices. That could trigger a new round of speculative newbuildis. “Every single downcycle we’ve had has been the result of over ordering,” Wobensmith said.

But Star Bulk Carriers chief financial officer Hamish Norton said he wasn’t as concerned about that scenario. “Every (private equity) executive who backed a speculative dry bulk firm has been fired,” Norton joked.

Norton says the advent of low-sulphur emission rules for shipping will be a positive for ship supply as more vessels are likely to use slow steaming in order to save fuel. “More fleets will slow down,” Norton said. “That means not enough ships.”

Barry Rogliano Salles (BRS) is tipping the shipping markets to recover on the back of a huge collapse in shipbuilding capacity. Ordering levels have fallen back to their lowest since the 2009 crash and world shipbuilding capacity has been slashed to cope with the new market realities. A combination of less capacity and limited ordering is now constraining new supply to over-tonnaged markets.

Since the peak in 2000, BRS estimates that in response to the shipping recession and lower contracting, global capacity has declined 35% to 45 million compensated gross tons (cgt) and that a further three million cgt could be lost this year. But it is the fall in the number of yards that is the most striking. BRS estimates there are only 630 active shipyards today compared to a peak of 1,150 in 2000. Commenting on 2016 in the brokers annual review, BRS president Tim Jones said: “The most significant and important step towards a healthier market was arguably the decline in global shipbuilding capacity.”

He believes the decline is set to continue and that yards across the Far East will be forced to cut back further. “The effective supply of reliable yard capacity is clearly being rationalised,” Jones said. “BRS research leads us to believe that up to 50% of South Korean capacity, 20 to 30% of Chinese and 10 to 20% of Japanese capacity will disappear by 2018.”

He also believes a dramatically reduced global ship finance capability is playing a part in restricting investment in new ships. BRS estimates that debt and equity capital market funding for new ships halved in 2016 from $10bn to $5bn compared to the previous year. “New banking regulations with Basel III ratios and compliance obligations have essentially made access to funds impossible unless, ironically, you don’t need them,” Jones said. “This is a huge brake on supply, which will continue over the foreseeable future.”

Reflecting on a painful year for yards in 2016, Jones talked of the “quasi-extinction” of newbuilding orders and of newbuilding prices in “freefall”. “The entire shipping market is under pressure and large swathes of the shipbuilding industry are now under threat from contraction or elimination,” he said. Shipowners’ money and investment has headed for what was perceived as better value in the secondhand market rather then newbuildings.

According to BRS figures, 107.7 million dwt was ordered in 2015, falling to just 34.1 million dwt in 2016. “The newbuilding market has also had to compete with the secondhand market, which offered many opportunities in 2016,” Jones said. “As a matter of fact, about 88 million dwt was bought or sold on the secondhand market versus a total 34 million dwt in newbuilding orders.”

While orders have collapsed across all sectors, the fall in newbuilding contracts has been most marked for containerships, reflecting the chronic over-capacity and recession in that market.
Around 26.9 million dwt of boxship tonnage was ordered in 2015 but that fell back to just 3.3 million dwt in 2016. “For the first time ever, the active containership fleet seems to have stalled,” Jones said.

Cancellations also continue to be a problem for yards, although not to the same extent as in previous years. BRS has revised its estimate of cancellations in 2015, up from nine million dwt to 13.2 million dwt. It estimates a similar level of cancellations – 13.1 million dwt – in 2016, although it admits the figure may also have to be revised upwards because cancellations often take time to come to light. Some 57% of cancellations in 2016 came in the dry bulk sector. There have been much higher cancellations levels in the past. Cancellations accounted for 36.6 million dwt in 2009 and 38.6 million dwt in 2010. However, that reflects the significantly larger orderbook at the time as well as higher price levels.

It is less than a year since George Procopiou lit up Posidonia with a series of seemingly outlandish and bullish comments about the state of the freight markets. “Buy anything that is a ship, I would say anything that floats, because almost everything is very cheap right now,” said the veteran Greek owner, to gales of laughter in Athens. They are not laughing now. Many owners are too busy chasing down new tonnage, especially dry bulk ships. “The market will come back on any type of vessel and you must be there,” argued the Dynacom and Dynagas principal.

Well, there you have it. This newspaper’s front page last week was filled with upbeat headlines such as “The cruise sector has begun 2017 with a bang”, “Sinopec launches ULCC venture” and “Dry bulk prices rising at ‘exponential speed’.” Even Procopiou might have been surprised to hear a panel member tell a conference in Athens last week that it was hard to concentrate because he had been up all night fighting off competition to buy a secondhand dry cargo vessel. It does indeed seem that a lot of people have taken the Dynagas man’s advice and are buying anything that floats (or even anything that nearly floats, judging by the warnings that have been issued about the poor physical condition of some ships).

But why this sudden exuberance, and is it justified?

The tanker market has been improving for quite a long time and the Chinese moving into ultra-large tankers is a unique event that deserves a separate analysis. The cruise ship sector has always trodden its own path, as it is partly a distinct consumer travel business. But dry bulk is at the heart of the traditional shipping world and is, temporarily at least, surfing a wave out of one of the most punishing market downturns ever seen.

The Baltic Freight Index is up 180% on this time last year at 1,100 points (although let’s remember it peaked at double this at the end of 2013 before halving again within a few weeks). The optimism that is sweeping the sector is based on several factors. The volume of global trade continues to trundle in an upwards direction but the arrival of US president Donald Trump has lit a fire under Wall Street equities, commodities and dry bulk shipping. Trump’s insistence that he wants to cut red tape, reduce taxes and rebuild US infrastructure has led investors to believe in a state-sponsored building boom that could be a bonanza for dry bulk shipping.

The other big change is internal. The dry cargo market has been primarily damaged by itself with overbuilding in the past. There is now a growing view that enough companies have disappeared, ships have been scrapped and new orders abandoned to allow balance to return to the supply side of the market. Most importantly, sentiment has turned, suddenly and dramatically. There is the possibility that Andrew Garcia’s GoodBulk could lead an initial public offering (IPO) renaissance in New York, which saw no shipping floats of any kind in the whole of 2016.

Meanwhile, secondhand vessel values are rising almost on an hourly basis, with owners beginning to question whether it would make more sense to move back into the newbuilding market. Certainly, there is no shortage of shipyards offering highly attractive prices to those wanting to order. It was sobering to see Greece’s Alassia NewShips Management buying a relatively new, 74,000-dwt bulker for less than $14m 10 months ago – and currently being linked with the purchase of a fairly similar ship at an estimated price of more than $22m.

The buying frenzy results partly from the relatively small pool of vessels being sold to a large and growing group of potential buyers. It is hugely welcome to see this optimism return but there are also obvious dangers that owners get panicked into overpaying and overbuilding, for fear of missing out on some new bonanza.

Let’s hope there is some caution and self-restraint alongside the enthusiasm. After all, like any good Greek philosopher, Procopiou was being provocative as much as prescriptive.

Golden Ocean Group has struck a deal to acquire the fleet of Quintana Shipping for about $364m in shares and the assumption of debt. The 14-vessel Quintana fleet, which averages four years of age, is comprised of six capesizes, three post-panamaxes and four kamsarmaxes and one 10-year-old panamax.

Under the deal, John Frederiksen-backed Golden Ocean will issue 14.5m shares, currently worth about $101m, to Quintana’s shareholders and assume the fleet debt of $262.7m.

At the same time, the New York- and Oslo-listed company reported that it had also agreed to buy two 2017-built ice-class panamaxes from Seatankers Management, part of Mr Fredriksen’s private empire. The consideration for those two vessels will be 3.3m shares in Golden Ocean. The 16 incoming bulkers will bring Golden Ocean’s fleet to 77 vessels, plus six capesize newbuildings scheduled to join the fleet by January 2018. It commercially manages another 45 vessels for third parties.

Putting the aggregate value of the transactions at about $412m, based on its March 14 share price, the company said that the expansion would add significant scale to the operation and contribute to reducing cash breakeven levels.

“We consider the price obtained to be attractive and expect the transaction to be significantly value-accretive to our shareholders,” said Birgitte Ringstad Vartdal, Golden Ocean Management’s chief executive. The all-share transaction “underscores the value the sellers ascribe to our operating platform, management team and corporate strategy”, she said.

According to Ms Vartdal, a feature of the acquisition is “attractive bank financing”, which includes no fixed debt amortisation and soft covenants until June 2019. Golden Ocean has just raised $60m in equity and is using a $17.4m tranche of the proceeds for a downpayment to Quintana’s lenders in return for those terms. A sweep of excess cash generated by the fleet will be used to pay deferred amounts.

Following the latest raising of equity, once the transactions complete, Mr Fredriksen’s Hemen Holding is expected to remain Golden Ocean’s largest shareholder with about 37.6%. Quintana interests will become the second-largest shareholders with about 11%.

Quintana Shipping was launched in 2010 by US energy investor Corbin Robertson Jr, together with a Riverstone/Carlyle energy fund. It acquired its first ship the following year. Mr Robertson built his previous major dry bulk shipping venture Quintana Maritime into an owner of 29 vessels in three years, then sold it to Excel Maritime Carriers in April 2008.

This time he has had to wait along with the rest of the industry for an elusive dry bulk recovery to materialise. Quintana filed for an initial public offering back in 2014, but that was kept on ice until the application was finally withdrawn a few days ago.

Lefteris Papatrifon, Quintana’s chief executive, told Lloyd’s List that the all-share nature of the deal was a sign that the shareholders wanted continued exposure to a recovering dry bulk market. “It will allow them to have liquidity and flexibility in managing their own shareholding positions,” he said. “There is a lot of interest from many people right now in buying quality dry bulk assets,” he noted.

The fleet is expected to be delivered gradually during the second quarter as vessels are freed of cargo and at appropriate ports.

Public shipping companies have never raised more money in the US capital markets than they did in 2014, a year described as “astounding” by one industry banker. According to data compiled by Fairplay, US-listed owners grossed an unprecedented USD8.17 billion via 63 offerings that year. Share pricing was far frothier in the 2003–08 super-boom years, and there were more initial public offerings, but there were fewer listed companies overall and lower follow-on proceeds in that earlier era.

With little fanfare, the US public shipping arena is now on track to topple 2014’s record. Including the USD60 million offering by Golden Ocean and the USD100 million offering by Navios Partners announced on 15 March, and assuming GasLog Ltd’s USD250 million bond sale goes ahead, Fairplay calculates that US-listed owners have grossed USD2.455 billion via 19 offerings in the year to date.

US-listed companies have raised more money in the first 10 weeks of 2017 than they did in the first 10 months of 2016. If the current fundraising pace continues through the remainder of the year – which is admittedly a big ‘if’ – 2017 will handily top the record set in 2014.

Beyond the sheer volume of activity, four trends stand out: investor interest in dry bulk, investor interest in liquefied natural gas (LNG) shipping, a rebound in the issuance of debt securities, and a heavy reliance on private placements.

Proceeds for companies with primarily bulker fleets totalled USD1.12 billion through mid-March, representing 45.7% of all money raised. Sellers of equity and debt securities in this sector have included Golden Ocean, Navios Partners, Eagle Bulk, Star Bulk, DryShips, and Globus Maritime.

Capital raising by US-listed LNG carrier owners totals USD1.1 billion year to date, representing 45.1% of all proceeds. Issuers have included Golar Ltd, Golar Partners, GasLog Ltd, GasLog Partners, and Teekay LNG Partners.

The remaining 9.2% of proceeds was raised through offerings by KNOT Offshore, Navigator Gas, Nordic American Offshore, and Top Ships. In addition, ongoing ‘at the market’ share offerings have been announced by Seaspan and TEN (in both cases, the volume of sales has yet to be disclosed).

In a major change from the previous two years, debt securities represent 58% of year-to-date gross proceeds, driven by issuances of Norwegian bonds, US unsecured senior notes, Term Loan B securities, and convertible preferred debt. In 2015 and 2016, debt securities represented only 19% and 20% respectively of total proceeds.

Meanwhile, US-listed shipping companies are continuing to raise a large percentage of proceeds via private placements, registered direct offerings, and other avenues besides traditional public sales. There has not been a US initial public offering by a shipping company since 2015.

Through mid-March, 49% of offering proceeds have been obtained through private sales. According to Fairplay data, private proceeds represented 44% of gross proceeds raised by US-listed shipping companies in 2016, but in all previous years, such sales represented less than 10% of annual tallies.