Dry bulk owners eye generational rate rally as minerals boom

Capesize owners’ effective earnings floor has risen to around $30,000 a day from $15,000 in previous years, according to Lars-Christian Svensen, CEO of Bruton and Himalaya Shipping.

At last week’s Maritime CEO Forum in Monaco, moderated by Mandarin Shipping chairman Tim Huxley, Svensen called the shift structural rather than temporary. “This is a tonne-mile story. You’ve just seen the beginning,” he told the invitation-only shipowner gathering on the Côte d’Azur.

John Michael Radziwill, chairman of CTM, argued that 2026 had exceeded expectations and that geopolitical disruption was supporting freight markets.

“I think we’re probably on the cusp of a generational rate rally,” Radziwill said. He noted that dry bulk had yet to match the extraordinary earnings seen in other shipping sectors since 2021.

Milena Pappas, commercial director of Star Bulk and head of Oceanbulk Maritime, said she was equally or even more bullish than Radziwill. She linked Guinea’s bauxite export boom and the ramp-up of Simandou iron ore production to substantial additional demand for capesizes and newcastlemaxes.

At Geneva Dry six months earlier, expectations were for Simandou exports of 45 million tonnes next year. Pappas said the estimate could now reach 65 million tonnes.

Can West African minerals sustain the rally?

If the higher Simandou estimate and Guinea’s bauxite growth materialize, shippers could face tighter capesize and newcastlemax positions. Carriers could gain rate-setting leverage, while forwarders could find it harder to keep customer quotations below prevailing owner rates.

West African mineral exports add tonne-mile demand rather than merely cargo volume. If the $30,000-a-day floor holds, it could cushion the traditional first-quarter seasonal weakness in capesize earnings.

Can new capacity break the rally?

Cesare d’Amico, CEO of d’Amico Società di Navigazione, was more guarded. He said shipping’s supply-demand fundamentals can change quickly and recalled the collapse following the 2004-08 boom.

Pappas put the dry bulk orderbook at around 16% of the existing fleet and approximately 19% for capesizes. She said tanker, container and gas carrier ordering has kept bulk-carrier deliveries further into the future.

Pappas described Hengli’s rapid emergence as a case study. The Chinese yard was expected to deliver 90 vessels this year and potentially 300 by 2030. Some newly established yards were asking prospective customers to source engines themselves.

Radziwill nevertheless acknowledged that the favorable supply position would eventually change. He expected dry bulk to become oversupplied and warned that a shortage of dry cargo ships would not last long.

For carriers and forwarders, the present orderbook provides breathing room; for shippers, it delays a large wave of new tonnage. The risk is that Chinese yard output outpaces West African cargo growth.

What do asset prices reveal?

Modern kamsarmax sales at $44 million to $45 million and capesize resales above $90 million already reflect the optimism surrounding the rate outlook.

D’Amico questioned the economics of paying $46 million for a 66,000-dwt ultramax. He calculated that the vessel would need to earn more than $18,000 daily over 20 years.

That entry hurdle leaves new owners more exposed if rates retreat from current levels. It also makes the asset-price rally harder to extend through fresh purchases at elevated valuations.

How are owners positioning for the fleet and fuel?

Asked where they would invest today, d’Amico favored people and operational improvements over additional ships. Radziwill said CTM had acquired 12 vessels since May.

Panellists reported little progress on decarbonisation over the past year. Svensen argued that LNG remained the only commercially viable dual-fuel option, leaving wider fleet-renewal decisions tied to fuel economics for now.

The Maritime CEO Forum is scheduled to return to the Monaco Yacht Club next autumn. Splash’s Geneva Dry commodities shipping conference returns to the Hotel Wilson on April 27-28, while Splash Singapore returns to the Fairmont Hotel on September 23.

The next test is whether Simandou reaches 65 million tonnes next year and Guinea’s bauxite boom keeps adding tonne-mile demand before Chinese yards accelerate. Hengli alone is expected to deliver 90 vessels this year and could reach 300 by 2030. If cargo arrives first, capesize rates and asset values could stay firm; if capacity moves faster, Radziwill’s warning of eventual surplus looms.