The bull run for bulker markets could last for years to come — if shipowners can resist ordering new vessels, according to GoodBulk’s chief executive. John Michael Radziwill told TradeWinds on Tuesday that owners need to learn from their mistakes, “and our big mistake has always been to oversupply our market with newbuildings. This time, let’s try not to do it. Because if we don’t do it, we could be talking about a bull market in years and decades, instead of months and years as usual.”

Radziwill acknowledges that is something shipowners say publicly every time the bulker market is on the cusp of something exciting. But the difference this time is the historically low orderbook, which is at almost 6% of the live fleet, he said. Radziwill has good reason to be bullish. When TradeWinds spoke with him by phone on Tuesday, futures contracts for May were trading at over $38,000 per day and average daily physical rates were assessed at over $37,000. GoodBulk reported another profitable quarter that same day and has returned more cash to shareholders as the Capesize market continues its upwards trajectory.

Radziwill said the owner has the least forward coverage it has ever had going into the second half of the year, ready to seize opportunities in the rising spot market. GoodBulk recorded net profit of $3.1m — or $0.10 per share — for the first quarter of 2021, down slightly on last quarter but a marked improvement on the $5.1m loss it booked for the first three months of 2020. Revenue totalled $49m during the first three months, aided by strong earnings for GoodBulk’s 22 Capesizes and one panamax bulker. Its Capesize fleet logged an average gross time-charter equivalent (TCE) rate of $14,592 per day during the first quarter and its panamax earned $12,954 per day. A year ago, its Capesizes earned $10,851 per day on average and its panamax had income of $1,864 per day.

Around 75% of GoodBulk’s fleet — comprising 22 Capesizes and one panamax — is open with a daily break-even rate of just $9,000. The comeback in Brazilian iron ore exports has made all the difference to the Capesize market in 2021 so far, Radziwill said. He noted that bulker markets have also had a “big surprise” from China since December and have benefited from the country’s trade dispute with Australia over coal. “China is still consuming coal, even more so than they were a year ago. They’re more concentrated on economic production at the moment than anything else,” Radziwill explained. “Tonne-miles have grown because China is still importing and Australia is still selling. You get Australia selling into Europe or India, and China buying from Indonesia, Colombia and South Africa.”

Bulker markets are also being aided after the worst of the pandemic by national economic stimulus plans around the world, supporting demand for both hard and soft commodities, he added. The company has made another quarterly “capital repatriation” payment to shareholders of $0.34 per share, the same level as in the previous quarter. Radziwill told TradeWinds that with this latest dividend, GoodBulk has paid out almost 50% of the original investment made in the company, which was $10 per share in April 2017. He said the firm is “pretty happy” with what the company has been able to achieve with its dividends over the past four years, considering that the world has suffered a pandemic and major disruption in the supply of iron ore from Brazil.

Talk of dividends and the positive outlook for bulkers naturally begs the question that TradeWinds has asked Radziwill so many times before: where does this leave GoodBulk’s plans for an initial public offering? The company, he said, remains on the lookout for potential opportunities but for now will stick with the formula tried and tested by his grandfather, John M Carras. “We’re looking at all options and we will go with the one that we’ve come to a well-founded conclusion benefits shareholders the most,” he said. “What’s nice about this portfolio is we adopted a low debt, high-dividend payout model when we started, which is something that my grandfather has been doing for almost 100 years,” Radziwill said.

In mid-2018, GoodBulk was forced to pull its $140m IPO in New York because investor interest did not meet its price expectations. Its securities are presently listed in the over-the-counter market in Oslo. GoodBulk saw an opening in the market at the end of March to buy back treasury shares at a discount to its net asset value, Radziwill said. The firm bought 20,100 of its securities on 24 March, bringing the total of treasury shares it holds to 541,464. “We said we would look at increasing our exposure, provided we could get, let’s say, ‘distressed’ pricing, very low pricing,” Radziwill explained. “We were able to achieve that for a small portion of our stock that was trading on the Norwegian over-the-counter exchange.”