Newcastlemax owner 2020 Bulkers will shift exposure back to floating contracts from April in expectation of a higher spot market for capesizes.
Six ships are on contract to Koch Shipping and the other two are with an unnamed European charterer.
Chairman Magnus Halvorsen told investors the Oslo-listed shipowner is in “no rush” to reconsider its forward charter coverage, given the positive outlook for the market.
How positive, exactly? “Interesting, if not unprecedented on the supply side,” he said during the conference call with investors on Wednesday.
“We have positioned the company for a strong spot market from April onwards. This is on the back of ongoing strong demand growth paired with low supply growth.”
The capesize orderbook is down to a historic low of less than 5%, according to Clarksons.
Muted fleet growth is expected over at least the next three years.
“Since the last peak in the capesize orderbook, lead times for new orders are continuing to increase and there are very few spots available before 2027,” Halvorsen said.
“There’s even been some orders placed for as far out as the second half of 2028.”
He also mentioned the rapidly expanding bauxite trade from Guinea to China as one factor supporting the capesize market. The trade grew by 30% in tonne-miles during 2023.
This month and next, the 2020 Bulkers fleet will be on fixed-rate employment.
2020 Bulkers has five vessels fixed on time charters for February and March at average rates of $20,869 per day. Three others have been fixed at $19,177 per day for the two months, just above the current market.
The Baltic Exchange assessed average capesize rates at just under $18,800 per day on Wednesday and has remained stable, contrary to the expected seasonal downturn ahead of the Lunar New Year holiday in Asia.
2020 Bulkers reported a net profit before tax of $14.8m for the final quarter, due to an unusually strong capesize market in late 2023. This figure is up from $6.7m a year earlier.
This means it finished the year with an annual profit of $25.6m, compared with $31.9m in 2022, when freight markets were stronger.
