The Joint War Committee (JWC) has placed the Sea of Azov and the Black Sea in its top-risk category in response to escalating tensions between Russia and Ukraine. Owners will now be required to notify insurers of voyages to these regions, with insurers likely to charge war-risk premiums. The JWC stated that the risk of miscalculations and collisions amid increased naval activity, as well as the potential for further escalation, made the designation necessary.

Dry bulk shipments out of the Ukraine have been relatively unaffected so far, with average daily loadings totaling 352k tonnes last week, compared to a 5-year average of 258k tonnes. At 7m tonnes (up to 20.02 inclusive), Ukrainian exports on bulk carriers so far in February are 2.8% higher compared to February of last year. Of these shipments, 55% have been grain cargoes, with 25% and 8% being iron ore and steels, respectively.

While most of last year’s wheat harvest has already been sold, there is still a significant volume of corn left to export. The Ukrainian agricultural ministry estimate that 15 MMT of the 2021/22 corn harvest are due to be exported in the coming months, equal to 45% of the season’s total forecasted corn exports.

China’s state planner, the National Development and Reform Commission (NDRC), last week stated it would increase efforts to ensure stability in prices and supply of key raw materials in 2022. Focusing on iron ore and fertilizers specifically, the NDRC is aiming to stimulate further growth in the raw material-intensive industrial and manufacturing sectors. Further, the Commission committed to increase new infrastructure construction projects and encourage increased lending to manufacturers by state-owned banks.

In the housing market, banks in several large cities have cut requirements on mortgage down payments.

After iron ore prices surpassed $150 per tonne recently, regulators vowed to cool prices by putting controls on speculative trading in commodity markets. They also began conducting port checks and increased fees on futures trading. Last week, authorities requested information on stock inventories and requested verification that traders were not engaged in tactics to drive up prices. Some market participants were also advised to release excess inventories following an investigation into stocks at Qingdao port.

Although the Chinese economy continues to perform at reduced levels, further monetary easing policies may help to improve activity and drive increased demand for several dry bulk commodities in 2022.

Dividends and decarbonization — that is what Golden Ocean plans to focus on this year, according to its chief executive. Ulrik Andersen told TradeWinds that the bulker company, which is backed by shipowner John Fredriksen, wants to stick to its strategy of making payouts to shareholders and has put contract cover in place to protect its dividend capacity. The Oslo- and Nasdaq-listed firm paid out half a billion dollars in dividends during 2021.

Golden Ocean naturally wants to expand its investor base, both institutional and retail investors, and the uptick in investor interest has helped with the liquidity of Golden Ocean’s stock, he told TradeWinds. High commodity markets have helped with investor sentiment and already some funds have invested in the space as a proxy for investing in commodities, Andersen said. Unlike its rival Star Bulk, which is aiming for a $3.8bn market cap, Golden Ocean doesn’t have a specific target in mind. “We want to make it as big as possible,” Andersen said. The pandemic has hampered the firm’s ability to travel and market itself to investors, so now is the time to get back out on the road, he added.

Golden Ocean has expanded its fleet by around 33% over the past year through a deal with John Fredriksen’s Hemen Holding. This has raised the firm’s market capitalization to over $1bn — Andersen points out it is currently trading at around $2bn. But part of the reason that bulker demand has held so firm over the past year has been down to coal. China and India imported large volumes to replenish inventories and prevent widespread power shortages during the final six months of 2021. Andersen said coal is “not going away”, with transportation demand for the commodity expected to grow over the next two to three years. On the other hand, there is mounting pressure for industries not just to quit coal as an energy source, but to dissociate themselves from the fuel entirely. Bulker owner Eastern Pacific Shipping has taken matters into its own hands and has officially banned the carriage of coal on its commercially managed bulk carriers. Would Golden Ocean consider following suit? Maybe one day, but not right now, Andersen said.

“Decarbonization is obviously high on Golden Ocean’s agenda,” he told TradeWinds. “But for now, we’re focused on efforts that will have a direct impact on our reducing our emissions.” Golden Ocean is not really coming under any external pressure to quit coal, its CEO said. “There are funds that choose not to invest in shipping but that’s because they see the industry as polluting, it’s nothing to do with coal as such,” Andersen said. For these reasons, he said it is better that Golden Ocean tackles its own greenhouse gas emissions. The best way to do this is by upgrading ships to run more efficiently and use less fuel, which lowers costs and adds value to vessels, Andersen said. Golden Ocean has also sold off four of its highest emitting vessels over the past 12 months. “You can expect to see us doing more of that going forward,” Andersen said. The shipowner has seven kamsarmaxes on order in China that will replace these older units from 2023 onwards.

Following the release of Golden Ocean’s annual results, analysts praised the firm’s commitment to paying dividends. Golden Ocean has no debt maturities due before 2023 and a relatively low level of committed capital expenditure for its newbuilding program. The company has already raised $22m for the newbuildings through the sale of older vessels, with $66m outstanding. It had around $300m in cash and available liquidity at the end of 2021. This, in combination with the company’s access to “attractively priced financing”, will give Golden Ocean the “flexibility to allocate capital freely and to focus on dividends,” CFO Peder Simonsen said during the company’s webcast with investors on Wednesday. Norway’s DNB Bank expects Golden Ocean to finance its upcoming maturities ahead of time, a note from the bank said on Wednesday. DNB estimates that Golden Ocean’s shares at trading at net asset value (NAV). Three months ago, it estimated that the stock was at 0.7 times NAV. Magnus Fyhr, equities analyst at HC Wainwright & Co, calculates that stock is trading at a 31% premium to his firm’s current NAV estimate of $9.10 per share, ahead of other public bulker companies.

The opening weeks of 2022 suggest another record year is on the cards in terms of the overall sale and purchase segment in shipping.

Last year set new highs in terms of ships changing hands with Clarkson Research Services tallying 148m dwt – equivalent of 7% of the global merchant fleet – sold for just over $47bn.

Clarksons’ overall secondhand price index rose 97% in 2021, with the boxship price index surging 168%.

Amid further price gains, the first six weeks of the year saw a busy start to 2022, clocking up another $6.2bn of secondhand spending. That’s an annual run-rate of around $53bn which would be another new record.

Bulker owner Belships exited 2021 with another record-high quarterly profit and is planning to share the wealth with its shareholders in an extraordinary dividend this year. The Oslo-listed company recorded net profit of $59.2m for the fourth quarter, equivalent to earnings per share of $0.23, up from a gain of $900,000 in the same period in 2020. The supramax and ultramax owner said the positive result was “mainly caused by the improved freight market and Belships’ increased fleet”.

The results cap off what has been a remarkable year for Belships. Its full-year net profit for 2021 totaled $133.4, compared to a loss of $17.7m in 2020. Belships will pay out NOK 0.90 ($0.10) per share for the fourth quarter period, equivalent to about 53% of its adjusted net result. It paid out NOK 0.55 per share in the previous quarter. It said its extraordinary dividend will be declared together with its financial report for the first three months of 2022.

Belships’ expanded fleet, which now numbers 27 supramax and ultramax bulkers, meant it had 35% more active days compared with a year ago. Much of the net result was generated by Lighthouse, Belships’ in-house commercial platform that handles cargo trading. Lighthouse contributed $22.9m of Belships’ fourth quarter Ebitda of $70.4m. Net freight revenue for Belships’ owned vessels was $225.8m during the fourth quarter, compared with $58.2m a year ago.

Its owned ships earned average time-charter equivalent rates of $28,965 per day during the period, a big increase on the $10,502 per day during the final quarter in 2020. This quarter, Belships has around 88% of its available vessel days booked at about $23,900 per day net. For the second quarter of 2022, the shipowner said it has covered about 62% of vessel days at about $22,400 net per day.

The shipowner has fixed several its ships on period deals in recent months. “Recently, the sentiment in the market significantly improved, and continued strong bulk markets is expected in the near term. Freight Forward Agreements (FFAs) for supramax currently indicate a market average of about $26,000 for the remaining part of the year,” the company said in its quarterly report. “As we mentioned in previous reports, the supply side as observed from the number of deliveries and the publicly quoted orderbook for our segment is historically low. On the back of stable demand, we remain optimistic in terms of market prospects.”

Belships has completed sale-and-leaseback deals for three ultramaxes over the past few months, including a newbuilding. This month, Belships also secured a new $116m loan from DNB Bank and Sparebank 1 SR-Bank that will be used to repay off its existing credit facility.

Shipping has piqued investors’ interest as markets have risen over the past two years, but female investors are still outnumbered by their male counterparts. The reasons behind this disparity are less clear. Often, female investors in this industry are women with family connections to shipping companies. A much rarer breed are female retail investors who have been attracted to the sector on the strength of its merits or out of curiosity, or women who work for institutions such as funds and private equity.

The gender of the people putting money into a company matters little. But engaging with women could come with benefits not just for shipping companies but for the finance sector that surrounds it, according to the professionals with whom TradeWinds spoke. As markets rise, a strategic aim for many public shipping companies is to grow their market capitalizations to become mid-cap stocks. Star Bulk Carriers, for one, is targeting a market cap of $3.8bn. This quest will involve marketing to a bigger audience, for one thing. Targeting women could be a way to unlock untapped potential.

Christina Stahn is managing partner at Notos Group, a “boutique” consultancy that works with institutional investors. Her firm specializes in the shipping and hydrogen sectors, advising on investments in debt and equity, as well as on restructurings, mergers, and acquisitions. She told TradeWinds that women in her line of work are few and tend to be less visible. “But that is nothing that can’t change and indeed I believe it is already changing,” she said. Stahn started her career in the international ship-finance department of one of the world’s biggest ship-financing banks of the time. “After about 10 years, I left to work with Notos as I have become interested in the equity side as well,” she said. “As it happened, Notos was developing an investor base for investments in maritime stocks, and at the same time was heavily involved in advisory services about the restructuring of bad shipping assets. “I liked the challenges of these businesses as various factors came together: you need a fundamental view of the shipping markets, a view of the capital markets, the respective companies themselves, and keep very close to the ‘real’ asset side through the restructuring business.”

Stahn thinks that encouraging women to invest their cash will ultimately have benefits for the wider financial sector. “I believe it is important for women to deal with the investment of their assets themselves, as a source of income in the future and particularly for their retirement,” she said. “If this catches on, there will be more and more women who will also be interested in doing it professionally. At the same time, it may help women to have more confidence in investing and in their investing decisions if they can get professional advice from other women.”

A few of the women to whom TradeWinds spoke said they perceived a certain psychological barrier among women — a certain lack of confidence and the perception that women somehow need to “prove themselves” and be even more professional than the men. New online platforms have been cropping up to help women break through these barriers, offering coaching and investment management. In Denmark, Female Invest focuses on financial education and has its own online community. Danish shipping company Norden collaborated with Female Invest and hosted two sessions late last year to introduce members of the platform to the world of shipping and to help them understand the industry. In the US, Ellevest describes itself as a “robo-advisor investment platform and financial literacy program primarily for women”. “We’ve heard from so many women that they have a different approach to investing than men,” Ellevest chief investment officer Sylvia S Kwan wrote in the company’s online manifesto. “Women are more risk-aware, and they prefer less volatility and more certainty of achieving their goals over taking big bets that may or may not be accompanied by greater investment returns. We’ve heard that what matters most to her is the achievement of her financial goals, and not outperformance as compared to an arbitrary benchmark.”

There is something young-feeling and, well, cool about platforms like Female Invest and Ellevest. Both have big presences on social media and their Instagram grids are basically meme pages, making jokes about spending habits and portfolio management. The humor may be niche, but it speaks the language of its audience. Nicole Andrescavage, who is based in the US, has been investing for about six years after a professor at her university sparked her interest in economics. “I invest on my own through Robinhood, mostly because I’m interested in the overall market but also for better returns than a savings account would offer,” she told TradeWinds. “I also have a 401K, which I intend to begin co-managing. I read a lot of books about Warren Buffett, and then his own writings, so I began to build my portfolio based off the teachings I took away from that.” Andrescavage thinks more could be done to engage female investors like herself. “Investors, if they are active traders and really following the entities they’re invested in, do get to have a say in business operations at times,” she said. “And their money either talks or walks, which isn’t super important on a micro scale, but certainly is at the macro level. Why wouldn’t we encourage women investors to chase that? My shipping industry holdings have done quite well over time too, which evidences the ability to personally benefit from the investments financially. The more the industry is in the news, the better for growing that now-increasing interest.” For other women, it is not a case of lacking in confidence, it is one of shipping having the right investment story to tell and the right person to tell it. As Andrescavage puts it: “It’s a great time to push more maritime/shipping stories into the news and attract that new money — and now is the industry’s chance to ‘elevator pitch’ how important and beneficial it is.”

TradeWinds spoke to several different female investors who said they got into investing in shipping following recommendations by J Mintzmeyer, founder of Value Investor’s Edge. The online platform is another example of how equities research is being democratized and made more accessible — to a diverse audience. Many of the women who invest in shipping stocks in their spare time had something in common: shares in Zim. The Israel-based liner operator launched its initial public offering on the New York Stock Exchange in early 2021 and its share price and its profits have ridden high on the back of headline-grabbing demand for container shipping since then. The stock was also the top pick on Value Investor’s Edge last year.

Jette Lise Knudsen from Denmark has been investing in shipping stocks for many years — both in Oslo and in the US. She thinks the ongoing story of shipping’s green transition has been and will be a good hook to get more women into the field. Knudsen thinks women are probably outnumbered by men in the investment field — but wonders if maybe women just don’t talk about it as much in public. Like Andrescavage, Knudsen thinks another good year lies ahead, which will help boost the industry’s profile among would-be investors. “I think 2022 will be another great year — and I am invested accordingly. When the next quarterly reports start to tick in soon, it will be obvious how attractive the shipping business has been again,” she told TradeWinds. “Hopefully a lot of new money will be pouring in then, and push the share prices to the level that they deserve.”

Stahn has her own advice for women looking to put their money in shipping. “Shipping equity investments should only be seen as a small part in an overall equities portfolio — the sector is too volatile for standard retail portfolios,” she said. “There are now two shipping ETFs [exchange-traded funds] available in the market — maybe that’s a more diversified approach for retail investors, but they are still very small in assets under management. I see shipping equities more on the institutional or HNWI [high net-worth individual] investors’ side.” It may be uncommon to find women handling equities portfolios that include shipping investments, but they are out there. “I work at a PE [private equity] fund with a portfolio company in logistics and I’m yet to come across a single woman,” one woman told TradeWinds. “It may be a function of shipping being a rather niche industry.”

Perhaps one of the most prolific female institutional investors is Sara Nainzadeh, who manages a portfolio for hedge fund Millennium Management — one of the world’s largest alternative asset management firms. Nainzadeh has dipped in and out of shipping equities for the best part of 20 years, alongside shares in utilities, transport companies, energy firms and other commodity producers. She was named one of The Hedge Fund Journal’s 50 leading women in hedge funds in 2020 and has spent a large part of her career at Millennium, plus a few years of running her own fund. Millennium had holdings in 22 different US-listed shipping companies during the third quarter of 2021, comprising all the major names across the mainstream shipping sectors, according to its latest available regulatory filing. Other institutional investors have women at the helm too. Barbara Ann Bertrand of Wincrest Capital has had dealings in shipping in the past but is not thought to be currently active in the sector.

Lomar Shipping is raking in a profit of more than $40m on the sale of a sub-panamax container ship purchased less than 18 months ago. The UK-based owner is selling the 2,872-teu Windswept (built 2010) for around $52m to China-backed logistics newcomer Transfar Shipping, according to market sources. The deal will net a chunky profit for Lomar, which bought the vessel in October 2020 for close to $10m. Since Lomar took delivery of the Windswept last February, it has operated on charter with Japanese carrier Ocean Network Express at around $18,000 per day. Lomar, which is part of George Logothetis-led Libra Group, acquired the vessel and sistership Windermere (built 2010) from NSC Holding of Germany.

The deal takes Transfar into the ship owning sector for the first time. The Singapore-incorporated company is one of the newest entrants to the transpacific trade, where it launched services last August. But it has been forced to shell out huge sums to charter a vessel it needed for services between China and the US east and west coasts. Transfar operates six chartered container ships of 1,200 teu up to 4,900 teu, according to Alphaliner. These have been taken for short periods at astronomical rates. Last July, the company agreed to pay $150,000 per day to take the 3,091-teu Minna (built 2005) from Germany’s Peter Dohle. The six-month fixture was then the highest time charter rate ever secured by the Hamburg tonnage provider. But shipowners said they have been willing to fix ships to Transfar, given that it is owned by Worldwide Logistics (Group). Worldwide is linked to Chinese e-commerce giant Alibaba, whose logistics arm Cainiao holds a 10% stake in the company.

The deal appears to confirm Lomar as one of the most successful asset players in the booming container ship market. It has raised about $1bn in gross proceeds from the sale of more than 25 boxships since December 2020. Meanwhile, Transfar has continued to fork out significant sums in recent weeks to take vessels for short periods, including paying $100,000 per day for the 3,388-teu Zhong Gu Shan Dong (built 2007) for three to four months. The 1,736-teu A Daisen (built 2010) was fixed at $60,000 per day for six months.

China pulling back from an ambitious emissions target for domestic steel mills is expected to bolster their output, which bodes well for dry bulk shipping. Affected by stricter capacity-cutting rules and elevated coal prices, the country’s steel production dropped 16% year on year in the second half of 2021, completing the year with a contraction of 3% for the first time since 2015.

The unexpected slump has raised the vigilance of policymakers about its economic consequence and contributed to Beijing’s recent decision to grant steel makers five more years to peak their carbon emissions by 2030. The government still restricts mills from adding new capacity, but the move is expected to help avoid similar disruptions experienced last year. “[The extension] may provide mills with the opportunity to increase output going forward,” said shipbroker Braemar in a report.

China is revving up efforts to spur its slowing economy, which has been hit by a combination of factors, including the pandemic, the side effects of decarbonization measures and the crackdown on the property market. The expansion of China’s gross domestic product slowed to just 4% in the fourth quarter, while US investment bank Morgan Stanley has cut its forecast for the first quarter of 2022 to 4.5% from 4.9% previously predicted, citing the impact of the Omicron coronavirus variant on the country. Beijing needs to secure sufficient supply of raw materials, including steel, to back its economic stimulus policies, highlighted by the resurgence of infrastructure investment. “I’m not surprised at all that, when push comes to shove, the economy is more important than environmental considerations,” said Banchero Costa head of research Ralph Leszczynski. “As already happened many times over the past 20 years, an almost default reaction to slowing growth and rising unemployment is to boost government investment in infrastructure, and this of course leads to more steel demand.” However, the shaky conditions of domestic property developers and the deceleration in housing construction, the country’s largest steel consumer, remain a big concern, he added.

The central government has shown a gesture of goodwill, including easing rules on presales, subsidies, and mortgages, to stabilize the market, but its aim to deflate the housing bubble has not fundamentally changed. “The ‘houses for living not for speculation’ policy remains in place,” said Mysteel, the Shanghai-based steel industry consultancy. It forecasts steel consumption of the real estate market to decline 2.7% in 2022, although the shortfall can be offset by that of infrastructure, which is expected to grow between 5.1% and 7.6%. The former sector normally consumes twice the amount of steel compared to the latter.

Meanwhile, the pushback of the carbon peak deadline has also offered steel plants leeway to complete the costly green transition, said Li Qianwen, an analyst of Shanghai International Shipping Institute. That means the reliance of China’s steelmakers on iron ore imports, the dominant source of demand for large dry bulkers, will also be extended. Beijing is pushing for an expansion in capacity of electric arc furnace steelmaking or the hydrogen-based process to increase efficiency and trim emissions. The first approach uses steel scraps instead of iron ores as raw materials. The uptake has been slow, though, said Ms. Li. “Steelmaking companies seem lacking enthusiasm to switch the technology, partly for cost reasons. The transition will take time and that’s why the government is giving them more time.” She expected China’s iron ore imports to keep steady this year, although the downtrend in the long term is inevitable.

A shake-up in Western Bulk’s corporate culture and trading patterns has helped the operator book a profitable end to 2021 that will kickstart dividend payments to shareholders. The Oslo-listed bulker operator recorded $72.1m in net profit after tax for the second half of 2021, more than eleven times the $6.1m it booked during the same period in 2020. Western Bulk said its board will propose a dividend for 2021 of $65m at its annual general meeting, which is expected sometime around mid-March. This would equate to a payment of roughly 52 cents per share, based on its outstanding shares.

The company has said it intends to implement a quarterly dividend policy of a minimum 80% of earnings after the first quarter of 2022.  Gross revenues during the last six months of 2021 were $922.6m, compared to $355.4m in the second half of the previous year.

For the full year, Western Bulk logged net profit after tax of $81m on the back of $1.49bn in gross revenues. Western Bulk operated an average of 114 supramax, ultramax and handysize bulkers during the second half of 2021. Its net time-charter (TC) margin per ship was $5,591 per day during the period, compared to $1,079 for the same period in 2020. For the full year of 2021, the operator’s net TC margin per ship was $3,376 per day, up from $663 per day in 2020.

Western Bulk said it has seen “returns on investments in operational improvement, excellence in execution and data-driven decision making”. Chief executive Hans Aasnaes said the company has built “a strong culture of co-operation, agility and continuous improvement. Through this, and by staying loyal to the strategy of utilizing the company’s risk capacity in the short-term market, Western Bulk is in a good position entering 2022,” he said in the firm’s financial report.

Changes in the company culture and cooperation across the organization have enabled Western Bulk to develop new trading patterns and take “a more holistic approach” to managing its fleet, the report said. Western Bulk said it expects market volatility to continue this year but is confident that it can capture opportunities in the market. “By being agile, building a culture with focus on cooperation, and staying loyal to the strategy of utilizing the company’s risk capacity in the short-term market, Western Bulk is in a good position entering 2022,” it said in its report.

Western Bulk listed on Oslo’s Euronext Growth exchange in September. Its shares have been registered on Oslo’s over-the-counter market for unlisted securities since 2017.

A Genco Shipping & Trading supramax has recently discharged the first containers shipped from China under a charter from FedEx. The 58,000-dwt Genco Pyrenees (built 2010) used the Port of Hueneme in California to deliver 184 containers packed with electronics, car parts, clothing and other much-needed items, port officials said.

FedEx said it is the first of several vessels it has chartered to carry essential consumer goods from China to the US west coast. The company said it can cut transit time by over 20 days docking at the Port of Hueneme rather than at ports in Los Angeles and Long Beach. “For FedEx Logistics, it is the first time in our history that we have chartered a vessel for our customers,” Udo Lange, president and chief executive at FedEx Logistics said in a post on LinkedIn. “Our team explored this idea so we could help continue the flow of goods, while the ports in Los Angeles and Long Beach work on solving the congestion they are experiencing.”

Lange said the company was “proud to serve as stakeholders on the White House Supply Chain Disruptions Task Force” and looked forward to continuing to provide input on solutions. “Providing this solution to our customers would not be possible without the collaboration of leaders at the Port of Hueneme and the US Navy base,” Lange said. “I’d also like to thank our team at FedEx Logistics. The tenacity and hard work of our team helped us deliver for our customers in an innovative way.”

FedEx is one of many big name brands that have taken shipping matters into its own hands due to the unprecedented disruptions in the container market. Soft drinks giant Coca-Cola opted to ship freight on bulk carriers rather than containerships in the face of port congestion and rising freight costs. The company has chartered the 34,400-dwt Aphrodite M, the 35,000-dwt Weco Lucilia C and the 35,130-dwt Zhe Hai 505 (all built 2011).

US retailers such as Target, Walmart and Home Depot have also claimed to have chartered their own tonnage to avoid the delays.