Bulker owners feel confident that the market should retain its strength over the next two to three years. Speaking on a Marine Money panel, five senior executives cited low supply growth and a continuation of strong demand as reasons for their optimism. They expect supply growth over the next 18 months of 2%-3%, while demand growth in tonne-miles was pegged at 5%-7%.

Asset prices also had room to go up, by 10%-15%, according to two executives, or by 20%-25%, according to another. The remaining chiefs estimated a rise of 50% up to 75%. Safe Bulkers’ president Loukas Barmparis said a supply squeeze could be expected over coming years as yard slots for newbuildings were only available in 2023 or 2024. “This is what we’re enjoying,” Dr Barmparis said, referring to the strong freight rates being experienced in all segments.

The US-listed company’s strategy is to sell its older, Chinese-built tonnage, in favor of younger Japanese-built vessels, as it continues its fleet renewal. “We don’t want to over-expand with the technology uncertainty,” he said.

With new regulations targeting efficiency, the executives agreed that slow steaming would be the way forward for some 80% of the dry bulk fleet. Any vessel built before 2012 will have to cut speeds by 10%-15%, said Seanergy chief executive Stamatis Tsantanis, who has invested in energy-saving devices on board his capesize vessels in conjunction with charterers. However, there are some ships in the market that just cannot be improved, he said, which would lead to scrapping.

Aristides Pittas, chief executive of EuroDry, who said he was comfortable running older ships, expects to see scrapping only when the market drops. In terms of technology, he said the draw to liquefied natural gas as fuel was waning, but there would not be any commercially viable alternatives until 2030 at least. “We could have 10 years of exceptional rates,” he said. “It’s a perfect storm”, one he never expected to see so soon after the last peak in 2005-2008.

The opinion was echoed by Grindrod Shipping’s chief executive Martyn Wade, who said the market was heading for the “most perfect quarter” as China expects to have a coal shortage over the winter months, and countries continue to import commodities to avoid being short. A growing population required “just-in-case” stockpiles, while the China-Australia trade spat was “fantastic” for the market, he said, adding that goods carried in boxes such as bagged grains, scrap, and general cargo, were now being carried on bulkers, given the skyrocketing container rates. Grindrod, which specializes in the smaller-sized bulkers, was benefiting from rates north of $30,000 per day. “We have enough people knocking on our door,” he said, referring to potential consolidation efforts, but he did not want to be teamed up with companies that focus on the larger sizes such as the capes. “This market is only starting — there will be opportunities.”

The executives cited not only strong demand from China, as millions of people need to be urbanized, but also from the rest of the world, which could keep steel production at elevated levels. The World Steel Association is expecting global growth this year of 6%, with China at 3%, said Magnus Halvorsen, chief executive of Oslo-based 2020 Bulkers. “Even if China may be cooling off, the global story is still a positive one,” he said, adding that his fleet of Newcastlemax were earning about $40,000 per day. Coal demand from China was not “disappearing” while infrastructure projects would require steel, said Mr Pittas. “The demand picture for iron ore, coal and grains creates the possibility for two to three years of a very good dry bulk sector.”

Mr Tsantanis said he was optimistic for demand for coal, with seaborne volumes expected to rise 9% this year, and 6% in 2021, driven by India and China. “Demand for iron ore and coal is unstoppable,” he said, adding that the returns he was making from his capesize fleet was in the region of $35,000-$40,000 per day. Two of his 16 vessels were on spot while the rest were on index-linked charters. Based on the bullish outlook, he was seeing more inquiries for longer period charters, spanning two to three years.