US-listed Safe Bulkers, an owner of 50 bulkers in the water and under construction, entered 2022 on the same heady pace as in the previous year. Net income for the first quarter, a traditionally weak earnings period for bulker owners, rose to $36.4m, a 71% leap from the same period of 2021. The result was underpinned by a 24% increase in net revenue to $77.7m. As a result, Athens-based Safe Bulkers reiterated a dividend of $0.05 per share. That is the same level as in the previous quarter, when the company distributed its first regular dividend in six years after its full-year profit soared by a factor of eight to $65.2m.

Rewarding shareholders, however, isn’t Safe Bulkers’ only priority. “We continue to focus on fleet renewal and expansion,” president Loukas Barmparis said. That primarily concerns the nine high-specification newbuildings the company has ordered in Japan. Earlier this month Safe Bulkers, one of Greece’s earliest bulker newbuilding contractors in the current cycle and certainly the most prolific, took delivery of the first of them — the 82,000-dwt kamsarmax Vassos (built 2022). Another five kamsarmaxes and three post-panamaxes are to gradually follow through to 2024.

In another priority, Safe Bulkers cut its debt by about a third year-on-year to $409m. That debt is almost entirely covered by the scrap value of its fleet, which the company estimates at about $395m. Benefitting from charterers’ growing appetite for longer charters, Safe Bulkers considerably increased the share of its fleet on medium- to long-term employment. As of 20 May, 12 of its 42 bulkers in the water were on time charters lasting more than a year. Another 10 were even fixed for more than two years. In one characteristic example, the 176,000-dwt Pelopidas (built 2011), will be chartered from June onwards for three years, extendable at charterer’s option for a fourth, at a gross daily charter rate of $25,250 per day. Safe Bulkers estimates its total contracted charter revenues at more than $400m in total.

Covid-19 weighed somewhat on results in the first quarter, adding about $500,000 in crew repatriation and related costs in the first quarter. The Ukraine war has not hurt the company either. Safe Bulkers reiterated a statement it also made earlier this year that it has no Ukraine or Russian crew, no vessels currently in the Black Sea and “otherwise conduct[s] limited operations” in Russia or Ukraine.

More statistics relating to today’s record containership orderbook are pouring in. According to Alphaliner, there are now just under 900 ships totaling 6.8m teu due to be built at yards around the world.  The pipeline of container newbuildings is bigger than the combined existing fleets of Cosco, Hapag-Lloyd and Evergreen, the world’s fourth, fifth and sixth largest liners, respectively.

The global reference fleet now stands at more than 25m teu, compared to less than half this size back in 2007, when the orderbook-to-fleet ratio peaked at 64.2%. Compared to the end of 2020, tightening yard slots, increasing steel costs and rising energy prices have pushed prices for container vessels up by 30% to 35% according to Alphaliner.

MSC, which earlier this year surpassed Maersk at the top of the liner rankings, has the largest orderbook with more than 1.7m teu set to deliver in the coming years, according to Sea-Intelligence. MSC’s orderbook alone would be the world’s fifth largest carrier, on a par with Hapag-Lloyd. Boxship contracting activity was up 256% in the first quarter of 2022 compared to the previous three months, according to Danish Ship Finance.

In 2023 and 2024, a massive 319 and 263 new vessels will be delivered, propelling fleet growth before scrapping to 8% and 6% measured in teu, respectively, Danish Ship Finance data shows. “If the current high contracting activity continues, we fear that oversupply will impact the container market for a long time,” a report from Danish Ship Finance published earlier this month warned.

The IMO has warned shipowners that mines in the Black Sea are putting seafarers’ lives at risk. The shipping regulator’s London-based secretariat said it continues to receive reports of mine sightings in the Black Sea off the coast of Turkey and Romania. The IMO said the mines are the result of the “ongoing conflict in Ukraine”. It added that they “present a serious and immediate threat to the safety and security of crews and vessels operating in the region”. The IMO is urging ships to navigate with caution. The United Nations organization said it would be liaising with stakeholders in the region to address the problem.

Shipowners and managers have been calling on the UN to provide escorts for ships, but so far there has been no solution offered to tackle the threat of mines. Nato said in an earlier statement that Bulgaria, Romania, and Turkey are deploying vessels to locate and neutralize mines in the region. The IMO warning suggests that ongoing efforts by littoral states to combat the problem may not have been successful.

The IMO’s safety alert comes a week after Nato issued a warning on mines in the western Black Sea. It said: “The threat of drifting mines cannot be ruled out.” It urged shipmasters to “take all precautions to mitigate the threat including avoiding floating objects”, and to “keep the forward area of the ship free of crew and use effective lookouts”. UN secretary general Antonio Guterres is attempting to broker a deal with Russia to restart grain exports. The removal of the mine threat will be required if grain exports from Ukraine are to be resumed. Guterres told reporters last week: “We need to find a way to have the food production of Ukraine and the food and fertilizer production of Russia brought back to the global markets despite the war.”

Belships has moved one of its older ultramaxes to a Norwegian KS (limited partnership) company and replaced it with a newer model. Chief executive Lars Christian Skarsgard confirmed to TradeWinds that the 63,000-dwt Belpareil (built 2015) is in the process of being sold. He did not disclose the buyer but did say it was organized using the KS structure. Broker reports suggested the ship is being sold for $29.5m, with VesselsValue assessing it to be worth $28m.

Belships then announced on Wednesday that it had acquired an unnamed 64,000-dwt, 2020-built ultramax financed through a five-year time charter agreement with options for a further three years. It has a non-binding option to purchase the vessel at the end of the charter “significantly below current market levels”.

The ultramax enters Belships’ fleet with a 10 to 12-month charter at $30,000 per day. The Belpariel was built at China’s Jiangsu New Hantong Ship Heavy Industry and is flagged in Norway. It is one of four ships in Belships’ fleet built in 2015. Together, they are the oldest of the company’s 29 vessels. Over the past year, Belships has sold off five of its older supramaxes and cut sale-and-leaseback deals for three other ultramaxes, one a newbuilding. The two ultramaxes currently on the water subject to those deals are the 61,000-dwt Belforest (built 2015) and 63,100-dwt Bellight (built 2016). The leases included a fixed interest rate and an average cost of capital of about 4.4%. KS arrangements have been used in a few sale-and-purchase deals in recent years.

Last year, German shipowner Oskar Wehr used the structure to create Selmer Bulk, in which it had a 25% stake in eight handysizes and two supramaxes purchased in a $37m equity deal. Oslo’s Atlantica Shipping has used the KS system, as well, purchasing the 50,800-dwt MR2 product tanker Arctic Bay (built 2006) in December.

A steady volume of deals for secondhand capesizes underscores just how robust market conditions for such vessels have become lately. With asset values rising, the Baltic Capesize Index (BCI) hitting year-to-date highs and owners announcing lucrative multi-year chartering deals for such vessels, both buyers and sellers are stimulated to move. Owners of expensively acquired capesizes find a good opportunity to shake them off at an elevated price. That seems to be the case with Carras (Hellas), which brokers widely report as having agreed to divest the 182,100-dwt Aquadiva (built 2010) for anything between $31m and $32.6m. Some Athens-based brokers report the buyer to be George Economou’s TMS Dry.

The Aquadiva formed part of a rare series of six sisterships built at Denmark’s Odense Steelyard in 2009 and 2010. With a huge price tag of $110m each, they were likely the most expensive capesizes ever constructed. Four of these vessels were ordered or are owned by Carras (Hellas) and Monaco-based Goodbulk — the Aquadiva and sisterships Aquaprincess, Aquavictory and Aquamarine. It is telling for how far ship values have advanced this year that Carras sold one of them, the Aquaprincess, at a much lower price of between $24m and $25m in November 2021, to Greek peer Sea Gate Navigation. A few months later, in April, Goodbulk was reported as selling the Aquamarine for $26.5m. However, there are doubts if this deal eventually materialized.

Other capesize sellers are finding an opportunity to offload older tonnage, possibly to renew their fleets. Athens-based brokers report Eastern Pacific Shipping (EPS) as selling to unidentified Greeks the 177,000-dwt Mount Nevis (built 2005) for $20.5m. In a separate deal, Formosa Plastics Marine Corporation (FPMC) is said to be shaking out the 170,100-dwt Formosabulk Clement (built 2001), also built in Japan, for $13.8m. Managers at both EPS and FPMC didn’t immediately respond to a request for comment. However, the two companies could likely have a motive to sell the ships, considering that their websites show the Mount Nevis and the Formosabulk Clement to be the oldest capesizes in their fleets.

On the buying side of the fence, interest to acquire tonnage is ample as market conditions remain strong. “There is a plethora of purchasers,” Doric Shipbrokers in Athens wrote in their latest report. “As long as there is opportunity for older ships to make money, and as long as there is money to spend and interest to invest, secondhand activity will maintain its momentum,” Doric added.

Economou, the purported buyer of the Aquadiva, has recently provided ample proof of being in bullish mode. The Greek owner has been linked to a string of secondhand acquisitions in recent months, several of which have already been confirmed. On top of that, Economou has been booking tonnage from other owners on a long-term basis. On 23 May, US-listed Diana Shipping announced that Classic Maritime — an entity known to be controlled by Economou — fixed the 179,100-dwt PS Palios (built 2013) for at least 22 months at $31,000 per day.

Singapore-based Grindrod Shipping has booked a first-quarter profit of just over $29m in what it has described as a historically strong start to 2022. The bulker owner saw a 60% year-on-year growth in revenue to $110.2m as its handysize and supramax/ultramax bulkers achieved average time charter equivalent (TCE) rates per day of $22,201 and $24,385, respectively.

“The quarter was the strongest first quarter for charter rates for our ship types in over a decade and lays a solid foundation for the rest of the year,” said Grindrod Shipping interim chief executive Stephen Griffiths. “Despite the uncertainty in the global economy created by the Russian/Ukraine conflict, Covid lockdowns in China and the disruptions to traditional trade routes, the outlook for the dry bulk sector appears to remain positive.” Griffiths said a healthy demand for minor bulk commodities and continued cargo spillover from tight container shipping markets, coupled with the smallest newbuilding orderbook in decades and congestion continue to lead to a tight supply/demand balance and strong freight rates.

Last week, Grindrod Shipping completed its withdrawal from the tanker market with the sale of the 50,100-dwt MR Matuku (built 2016) for $30m. It also exercised a purchase option on the chartered-in 57,800-dwt supramax IVS Pinehurst (built 2015) for $18m. The bulker is said to be worth $26.5m. The end of April saw long-serving executive Martyn Wade stand down as chief executive with a permanent replacement yet to be named. This has led to speculation that a sale or merger of the US-listed company may be on the cards. Sources recently told TradeWinds that Grindrod has been quietly exploring a possible sale or combination for several months.

London-listed Taylor Maritime Investments, which has built up its stake in Grindrod to 26.6%, has been touted as a potential suitor. Grindrod Shipping’s Island View Shipping brand operates a core fleet of 15 handysize bulkers and 16 supramax and ultramaxes.

Trading giant Glencore has struck agreements that could lead it to pay $1.1bn in settlement agreements with officials in three countries on charges of bribery and bunker fuel market manipulation. In addition to closing the book on bribery charges in the US, UK and Brazil, the deals see Glencore pay US fines related to market manipulation in fuel oil transactions at the ports of Long Beach and Los Angeles. Assistant attorney general Kenneth Polite, who runs the US Justice Department’s criminal division, said Glencore has agreed to pay far more than the estimated profits that it earned from the crimes. “Today our message is clear: crime does not pay,” he said at a Tuesday press conference.

Glencore, which said it cooperated with the investigations, said it agreed with the US Justice Department and Commodity Futures Trading Commission to $700m in penalties on the bribery charges and nearly $486m in the market manipulation cases. With $166m credited against “other, parallel matters” that include the UK charges, the net payment to the US will be $1.02bn, Glencore said. “We acknowledge the misconduct identified in these investigations and have cooperated with the authorities,” said Glencore chief executive Gary Nagle. “This type of behavior has no place in Glencore, and the board, management team and I are very clear about the culture that we want and our commitment to be a responsible and ethical operator wherever we work.”

The agreements come more than a year after former Glencore trader Emilio Jose Heredia Collado pleaded guilty to charges of market manipulation for bunker fuel deals at the ports of Los Angeles and Long Beach between 2012 and 2016, according to federal records. US Attorney General Merrick Garland said the scheme to manipulate price benchmarks lasted eight years. “This represents the Justice Department’s largest criminal enforcement action to date for a commodity price manipulation conspiracy in oil markets,” he said, adding that two Glencore traders have pleaded guilty.

In the bribery cases, US officials said in a press conference that the plea covers allegations that the company bribed public officials in seven countries. “Glencore engaged in these crimes to make hundreds of millions of dollars. It bribed public officials for business advantages across our globe,” said Polite. In Brazil, the company has struck a leniency agreement with the Federal Public Ministry (MPF), the country’s prosecution office, to pay fines of nearly $40m in connection with bribery investigations. The company was accused of paying some $39.6m in bribes to Petrobras, Brazil’s government-controlled oil company, in connection with bunker fuel sales. The MPF said on Tuesday that in addition to paying a fine, Glencore agreed to provide information about participants in the bribery scheme and to adopt transparency and ethics measures.

In London, Glencore Energy UK indicated at a hearing in Westminster Magistrates’ Court that it will plead guilty to charges brought by the UK Serious Fraud Office (SFO) after an investigation that started in 2019. The agency said it charged the Glencore unit with seven counts of bribery in connection to its oil trading operations. “SFO investigators exposed profit-driven bribery and corruption across the company’s oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan,” the office said. “The SFO’s case is that Glencore agents and employees paid bribes worth over $25m for preferential access to oil, with approval by the company.” Although UK fines have not been set, Glencore said the total payout in the three countries is not likely to differ materially from the $1.5bn provision for the cases that it recorded in its 2021 financial statements.

Glencore still faces investigations in Switzerland and the Netherlands, and the company said it is continuing to cooperate with officials there. “Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred,” said Glencore chairman Kalidas Madhavpeddi. “The board and the management team are committed to operating a company that creates value for all stakeholders by operating transparently under a well-defined set of values, with openness and integrity at the forefront.”

Hong Kong’s Jinhui Shipping & Transportation is lowering the age of its operated fleet with a seven-year charter for a panamax newbuilding. The 84,100-dwt Taho Circular will be delivered from Oshima Shipbuilding in Japan in June. Jinhui said the owner is Panama’s THC International. Other vessels with the Taho prefix are operated by Ta Ho Maritime Corp of Taiwan. The vessel will join the Oslo-listed charterer’s fleet for a minimum of 81 months, rising to 87 months at Jinhui’s option. The rate will be based on the Baltic Exchange’s panamax route indices plus 20%, with the minimum amount set at $11,500 per day, but a ceiling of $14,500. Jinhui will pay at least $24.6m in hire fees over the term.

VesselsValue assesses the new bulker as worth $44m. Jinhui said management continuously reviews prevailing market conditions. The company views the deal as a chance to boost its carrying capacity with a modern ship without having to buy. The transaction improves the fleet profile with minimal capital expense, the operator said. Jinhui added this is part of a process of “fine-tuning” the fleet to lower the average age.

The shipowner has not ruled out further acquisitions or disposals as it adjusts its capacity. Jinhui controls 23 ships ranging from 93,000 dwt to 52,000 dwt. The new addition will be its third-biggest vessel. The company’s fleet dates from between 2004 and 2012.

In March, Jinhui added its first bulker of 2022, spending $25.5m on an unnamed secondhand supramax. Brokers have linked the company to the 64,000-dwt ultramax Hanton Trader II (built 2014), however. The vessel is controlled by Nisshin Shipping of Japan.

The C16 transatlantic backhaul route for capesize bulkers has emerged as a serious money maker as Europe seeks coal from greater distances during the Russia-Ukraine conflict. The average spot rate for this ballasting route has skyrocketed to $30,500 per day on Monday from $1,050 per day when the war began on 24 February, according to Baltic Exchange data.

This astounding rate, which has not been seen in eight months, is rivalling the average spot rate for the C8 transatlantic round voyage between Brazil and China, which stood at $33,125 per day on Monday. The C16’s average spot rate actually surpassed the C8 figure by $5,250 on 13 May by reaching $28,500 per day, but the C8 rate has since recovered to $33,125 per day on Monday.

The fronthaul C9 route still has a much higher rate than its C16 counterpart at $62,350 per day on Monday, though it has risen much more slowly since the war began, from $39,200 per day. “The discounted backhaul C16 is designed in tandem with the premium-paying fronthaul C9 route,” a Baltic Exchange spokesperson told TradeWinds. “While the one positions vessels into the Atlantic, the other delivers cargo from the North Atlantic into Asia, ultimately redelivering vessels into the highly tonnaged Asian area.” But the C16 backhaul has become more of a cargo route to ship coal to Europe from Asia instead of from Russia, while the fronthaul C9 and the transatlantic C8 became “relatively stagnant” as fixture activity in the North Atlantic weakened. “This brought the spreads between the three routes much closer, with speculation that the backhaul could catch up to the fronthaul levels,” the spokesperson said.

“Further speculation posited that without an improvement in Atlantic-based business, the increasing number of vessels heading to the North Atlantic was feared to over-tonnage the area, further exacerbating the poor Atlantic situation. Fortuitously, demand for vessels in the Atlantic basin improved dramatically last week, sparking a surge in rates for the region and a healthier market all round.” The war-shifted coal trades are why C16 spot rates are higher, but most capesize cargo remains on the Pacific round-trip voyage from Australia to China and the Brazil to China route, said John Kartsonas, founder of dry bulk exchange-traded fund platform Breakwave Advisors. “Although the backhaul is thriving, not a lot of cargo moves that way compared to the iron ore trade that dominates capesizes,” he told TradeWinds. “So, yes, the C16 rate is impressive, but that does not define the capesize market by any means.”

But “sentiments are strong” across all dry bulk shipping as owners and charterers face disrupted cargo flows and a global energy shortage, said Giuseppe Rosano, founder of UK broking house Alibra Shipping. “We are in unprecedented times and the market is adjusting. As to why and how, we are all trying to fit the pieces of the puzzle now — whilst that does mean cargo flow is part of that change, especially given the European crisis,” he told TradeWinds. “I think we could see a boom after the summer or, knowing this market, that could happen earlier.”

Diana Shipping has found a much more lucrative time charter for a capesize bulker that just came off a one-year contract. The Semiramis Paliou-led owner of 35 bulkers has fixed the 179,134-dwt PS Palio (built 2013) to George Economou-controlled Classic Maritime at $31,000 per day for at least 22 months. The charter, which may be extended to slightly more than two years, is expected to earn $20.6m for the minimum period of the contract. The deal emerges as period rates for capesizes have been rising since mid-April.

Clarksons’ assessment of a one-year charter of a 180,000-dwt bulker rose to $31,000 per day on Friday, up from $30,500 a week earlier and from about $27,600 on 15 April. That’s still below spot rates, which saw capesizes were earning nearly $38,200 per day on average on Monday, according to the Baltic Exchange. That is up from about $37,500 per day on Friday. The PS Palios came off a 10-month charter to Olam International on 23 April that earned $26,500 per day.

The average rate for one-year capesizes during the time of this fixture ranged from $24,156 per day in November to a height of $35,325 per day in October. Half of Diana’s 12 capesizes are currently on charters, five of which are ending within the next few months.

The charter is the latest for the Greek company since the 182,063-dwt Florida (built 2022) was fixed in late March on a rare five-year charter to Bunge at $25,900 per day. Many of Diana’s other ships, eight panamaxes, six kamsarmaxes, five post-panamaxes and four newcastlemax, are employed into 2023.