Norway's Belships says it will continue to expand its fleet,after confirming the acquisition of two ultramax bulkers on Monday.
The Oslo-listed bulker owner has added 11 ships to its fleet over the past two years.
Chief executive Lars Christian Skarsgard told TradeWinds the plan is to keep the expansion going.
"We are generally looking for more ultramaxes, which includes both secondhand and brand new. It's still the goal to build a bigger company," he said.
Belships has signed letters of intent to acquire the two ultramaxes, which are under construction in China.
The 61,000-dwt vessels are expected to be delivered in August and September this year and are being built to a "Japanese design", which Skarsgard declined to specify.
They will be financed through 10-year bareboat charters with purchase options at "below-market values", but Belships has no obligation to buy the pair.
The company will pay $2.6m per vessel upon signing the contracts, which it expects to complete this quarter.
Arctic Securities analysts said they were "impressed by Belships’ ability to grow its fleet with only modest cash investments".
"Given the historical low orderbook and the healthy demand outlook, we believe that adding vessels with relatively prompt delivery makes a lot of sense," the investment firm said in a note on Monday.
Asset upside
"The market has really come to life over the past month and we see ship values have started to move," Skarsgard told TradeWinds.
"However, compared to the current spot and period market, ships should be priced at least 25% higher. So, we obviously see a big upside to continue investing now that we are also facing a low orderbook with potentially the lowest rate of supply growth in 30 years."
He expects to see these significant movements in the near term, as low fleet growth lags behind strong demand for seaborne transport of dry commodities.
Belships has around 80% of its remaining vessel days open in the spot market during the last three quarters of 2021, leaving it poised to seize the rising rates it expects to see.
That the company should have such a low level of forward booking is remarkable in itself, according to Skarsgard.
"We've never been this open later this year, spot exposure-wise," he said. "We're very positive to the market outlook."
Average supramax spot rates have increased by more than 63% over the past three weeks to the highest level for almost 11 years, according to historic Baltic Exchange assessments.
In late 2019, Belships bought resale contracts for two ultramax newbuildings that will arrive this year, one of which has already been delivered.
Once the acquisitions and newbuildings are delivered, its fleet will consist of 23 supramax and ultramax bulkers with an average age of five years.
Earlier this year, it sold two 12-year-old supramaxes.
