Capesize rates have been in the doldrums since late January's Vale dam catastrophe, but Safe Bulkers' Polys Hajioannou remains optimistic for the second half of 2019.
Rates for the ships have fallen 74% to $3,460 per day since the iron ore giant's closure of 50 tailing dams in the wake of the Brumadhino dam collapse which took 40 million tonnes off the market.
"The market right now is a bit challenging on the bigger ships," Safe chief executive Hajioannou said Monday during Capital Link's International Shipping Forum in New York City.
"Indeed this Vale situation with the collapse of the dam created a lot of consolidation of cargoes and a big reduction of output from Brazil, which was hurting a lot by affecting tonne miles."
He said rates should recover soon, though, because the difficult situation should sort itself out in three or four months.
''I'm more optimistic for the second half of the year in the big ships simply because demand is there, ... better economic indices are coming out of China and we believe the trade war will come to an end," he said.
"Also, we have the elections in the US next November, so it's better to sort out things faster than later."
Smaller ships holding their own
Despite the "big ship" troubles, smaller vessels such as kamsarmaxes and panamaxes are earning up to $12,000 per day, Hajioannou said.
"Overall, supply and demand are finally balanced," he said.
"As soon as the problem with iron ore output is sorted out, we think ... we'll see a good change in rates."
Safe Bulkers' fleet consists of 14 panamaxes, 10 kamsarmaxes, 13 post-panamaxes and four capesizes.
