Taylor Maritime Investments (TMI) is expecting better handysize bulker rates later this quarter.
The UK-listed company said Chinese New Year holidays early in February typically result in a seasonal softening, following on from weaker markets towards the end of 2021.
Chief executive Edward Buttery added: “We’re optimistic about the outlook for 2022 and expect that the market will start to firm again after Chinese New Year in anticipation of two to three years of further strength.”
Current average net charter rates are $19,000 per day for TMI’s ships, but this figure should rise in February.
The tailing off at the end of last year was due to lower spot demand and negative sentiment created by Chinese construction industry difficulties and normal seasonal weakness.
Period time charter demand has been firming, however, suggesting customers expect upward momentum in the medium to long term, according to TMI.
“Additional support for handysize freight rates has continued to be provided by container cargoes being carried on dry bulk ships and from port congestion, both of which might recede in the medium term,” it added.
Six TMI vessels have been fixed on new deals during January.
One found work for a year, and the others were booked for less than six months each.
The company has indicated it is favouring shorter-term deals in expectation of stronger rates later this quarter.
The handysize orderbook continues to be at historic lows, standing at 4.6% of the existing fleet and underpinning favourable forward supply dynamics, TMI said.
Clarksons data shows the orderbook has a staggered delivery over the next three years, with 2.5% coming in this year, 1.7% in 2023 and 0.5% in 2024.
This remains the lowest of all larger dry bulk segments and non-dry bulk segments.
TMI believes this is due to newbuilding price inflation as commodity costs rise, as well as uncertainty around environmental regulations.
Beyond 2023, it said vessel supply may also decrease due to lower operating speeds required to meet decarbonisation targets.
Minor bulk demand growth of 3.1% in 2022 is expected to outpace net fleet growth, which is flat at 0.1%.
At the end of the last quarter, TMI increased its revolving credit facility from $120m to $160m.
Net asset value was $1.44 per share, an increase of 3% since 30 September.
During the final three months of last year, it took delivery of 11 ships, boosting the fleet to 31. Another vessel is due soon.
The market value of the vessel portfolio was $529m, a decrease of 1% or $7m versus the 30 September valuation.
