Handysize specialist Taylor Maritime Investments (TMI) is boosting contract coverage ahead of the holiday season.
And the London-listed owner’s chief executive Ed Buttery told TradeWinds he would like to see more charter deals concluded ahead of an “inflection point” for the sector.
The CEO said the spot market was paying $6,000 or $7,000 a day on handysizes a month ago.
From there, earnings rose to $9,000 or $9,500 very quickly, he explained.
And now in the Atlantic, rates of up to $13,000 are being seen.
Buttery said this is helping asset prices recover, with a lot of interest in secondhand deals for handysizes and ultramaxes.
He pointed to congestion in the Panama Canal and for capesizes in China, coupled with a lot of exports from the US Gulf, as positives for the sector.
“And obviously India, everyone’s chitter-chattering about India, but we’ve been doing that for the last 10 years. So who knows? But they have talked about banning sugar exports, which creates further tonne-mile demand,” Buttery said.
“I think the rise probably is where the market should have been. I think that we’ll see a seasonal softening, as always, Christmas, Chinese New Year,” he added.
As a result, TMI and its subsidiary Grindrod Shipping are trying to fix their ships through Chinese New Year.
“But that being said, next year looks like it could be a half-decent year,” the CEO told TradeWinds.
A shortage of ships
“We’ve got maybe an inflection point coming in terms of supply and demand without demand having to really be excessive. There is a shortage of ships,” he said.
Chief operating officer Carl Ackerley added: “We’re not trying to reinvent markets or dominate markets elsewhere. We’ll leave that to people with hundreds of ships. We like to focus on what we think we’re good at.”
And Buttery explained that in terms of handysizes, “our job is to create flexibility of earnings and the best thing to do is not take risk between holiday periods.”
“So we have been focused on increasing coverage over the last three weeks. And we have been successful in our goals,” he said.
“I would like to increase it significantly between now and the end of the year and really look to set ourselves up for a good 24, 25, maybe 26. And the best way to do that has been reduce debt, reduce our breakeven through debt reduction, get rid of older ships,” the CEO added.
He summed up his market view as “cautiously optimistic”.
“If you pay off all your debt, your breakeven’s low, life’s good. So that’s what we’re focused on,” Buttery concluded.
