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Safe Bulkers: Ships for the 2030s

Today sees the launch of the latest issue of Maritime CEO magazine with Polys Hajioannou from Safe Bulkers on the cover. The autumn edition features interviews with many of the world’s best known shipowners, top markets commentary as well as the more light side of life in the recreation section towards the back of the magazine.

On the occasions where Maritime CEO has had the chance to interview Hajioannou it’s been clear from the get-go that we’ve been sitting down opposite a visionary within the shipping industry.

Days after our most recent encounter where Hajioannou had explained why he felt this particular dry bulk run had legs, backing up this prediction, the Cypriot announced a fixture of a Safe Bulkers capesize for up to four years, expecting to earn a minimum $26.7m, as the Baltic Capesize Index hits highs not seen for 13 years.

“Demand is on the rise whereas supply is unable to follow, thus the charter rates are continuously moving upwards. Strong fundamentals support further upside in dry bulk,” a bullish Hajioannou tells Maritime CEO.

Other ship types have jumped the queue at Asian shipyards providing dry bulk with a long runway supply/demand-wise, Hajioannou says, pointing to the massive, record ordering of containerships over the past year, which have made dry bulk slots at yards “very tight”, he says, with anyone ordering now likely having to wait until 2024 for ships to deliver.

The dry orderbook as a percentage of the dry bulk fleet stands at 6%, the lowest in the last 20 years, Hajioannou points out. This slow-paced fleet expansion will be a key factor for the long-term health of the dry market, he insists.

A further reason that Hajioannou believes in his firm’s favour is the fact that stringent environmental regulations and climate pledges to cut carbon emissions in order to reach a CO2 emissions peak by 2030 will favour companies with modern fuel-efficient fleets. Older fuel vessels are likely to become less competitive, he suggests, taking also into account that a significant portion of the global dry bulk fleet will be turning 15 years old over the next few years, thus facing increased environmental scrutiny. In addition, uncertainties regarding emissions regulations and propulsion technologies will probably limit the ordering activity;

Another point in favour of a protracted dry bulk run, according to this seasoned shipowner, is that demand as expressed in seaborne trade volumes is expected to be strong at least for the next 12 months with the global commodities demand catching up to pre-Covid levels further supported by green infrastructure and renewables projects taking up a big component of the fiscal stimulus both of the US and China, which ultimately will have a direct impact on long-term productivity and the global GDP.

Hajioannou describes the dry bulk market of last year as a rollercoaster, recalling: “The global output declined about three times as much as during the global financial crisis in half the time as a result of the Covid-19 pandemic, which led to a severe global recession unique in its depth and severity. The combination of Covid-19, which led to the collapse of freight rates and to liquidity crunch, the introduction of ever-changing environmental regulations, green shipping, decarbonisation, geopolitics, capital allocation strategies and alternative finance, were among the most significant challenges we had to address along with the inability to make crew changes. Despite the uncertainties we have managed to break even as early as the third quarter of 2020 and returned in black during the fourth quarter of the year.”

For the full interview and a chance to read the entire magazine for free, click here.

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