Major bulker owners are optimistic for an upturn in the freight market next year, a London conference heard today.
Amid signs investors are again showing an interest in the sector executives from a number of public companies were, however, moderate in their expectations for the coming year.
Stamatis Tsantanis, chief executive of Seanergy Maritime, told the Capital Link Forum in the City that FFAs were pricing for stronger rates next year.
“This is a good thing as it means we have moved past one of the worst crisis in the past 30 years,” he said.
Tsantanis noted the FFA projections include the belief that rates in the first and second quarters of 2017 will be very low.
“We are optimistic,” he said. “We think that the market is going to average probably 40% or 50% higher than in 2016, which is a significant increase. However, it is still very low compared with the average of the past 30 years.”
Gary Vogel, chief executive of Eagle Bulk – who was quiet on TradeWinds’ reports yesterday that his company had returned to the sale and purchase market when the point arose on the panel – believes 2017 will bring higher earnings due to progress in addressing the supply of vessels.
“Trying to determine exactly what rates [will be] is difficult,” he said. “It’s about risk management. It’s about being able to cope with challenging markets that are more prolonged than you expect.”
Birgitte Ringstad Vartdal, chief executive of Golden Ocean, noted that the first quarter of 2016 saw around 100 capes idled and all these ships have since resumed trading.
“At the same time, fleet growth has been almost zero for the period,” she said. “So if there is any increase on the demand side this will increase utilization and activity because there is not that much spare capacity.”
David Morant, managing director of Scorpio Group UK, said the company believed rates had troughed in the first quarter this year.
“We are not banking on that and are taking additional measures this week,” he said, alluding to moves to delay the delivery and reduce the price of six newbuildings.
“We certainly are positioned for more short term turbulence,” Morant added. “We are confident we can weather that out but we are optimistic we may have got through the toughest part of this down-cycle.”
Western Bulk Chartering chief executive Jens Ismar said it was “not unlikely that next year will be better than this year”.
“There is a lot of uncertainty and I think we just need to grind on and be prepared for the unexpected. That’s the way these markets are,” he said.