Dry bulk leaders expect steady trade, scrapping in 2026

On fleet strategy and earnings exposure, the discussion drew a clear line between companies pursuing deliberate spot-market exposure and those balancing it against contract cover.

Mr Norton said Star Bulk stayed “primarily spot” because shareholders wanted spot exposure and because, in his view, owners with sufficient balance sheet resilience tended to “end up making more money in the spot market than if you fix out”.

Mr Pittas described a similar toolkit but with more explicit use of risk management, saying Euroseas sometimes used forward freight agreements for cover depending on risk appetite and near-term expectations.

Mr Fairclough said Wah Kwong’s allocation between spot and time charter depended on market view and risk management, with the company seeking “performance arbitrage” by deploying modern, efficient ships on longer-haul trades while placing older tonnage on routes less sensitive to fuel and efficiency.

When the moderator raised consolidation – citing a proposed Diana Shipping cash offer for Genco – Mr Norton said public-market valuations had created a structural block.

Newbuilding prices look very expensive given expected charter rates

He said most listed dry bulk companies traded below net liquidation value, limiting the appeal of issuing shares for acquisitions, while boards still demanded at least liquidation value plus a premium in any takeover. “I think the consolidation process is stuck at the moment,” he said, adding he would be surprised if proposed deals progressed “in anything like the currently proposed structure”.

Mr Petersen said consolidation could still happen where a public company could issue equity close to net asset value, pointing to Pangaea’s merger with a private company and share issuance at NAV to add 15 handy-sized ships, but he also characterised the sector as fragmented in ways that limited the operational impact of scale on freight-market outcomes.

On demand, panellists broadly described 2025 as bifurcated, with a weak first half followed by a stronger recovery, with Mr Petersen noting that the first six months had been “extremely challenging”, and attributed the severity to negative macro narratives rather than a straightforward collapse in fundamentals.

He said customers such as power plants, steel mills and commodity traders sounded “pretty confident” about demand over the next 12 months, leaving Pangaea “cautiously optimistic” but not positioned for “huge movement in either direction”.

Mr Pittas said geopolitics had increasingly overshadowed conventional supply-demand modelling, but he still expected 2026 to hold “around these levels plus or minus 20%-25%”.

Mr Norton struck the most explicitly bullish tone and said coal, grain and minor bulk volumes look set to remain strong into 2026, supporting smaller ship segments, while iron ore could deliver higher tonne-miles even without meaningful tonne growth.

He argued that rising production from Brazil and Simandou in Guinea would still be absorbed by China, potentially displacing shorter-haul Australian volumes and increasing tonne-miles.

Separately, he dismissed concerns that bauxite demand might soften materially, arguing aluminium demand remained broad-based and that West Africa-to-Asia bauxite had cost and logistics advantages. “I’m not worried about bauxite as a cargo,” he said.

Mr Fairclough emphasised coal’s sensitivity to Chinese policy and weather-driven power demand and said the Chinese government’s approach to domestic coal production and coal pricing had been an important driver of market shifts, noting domestic coal prices had dropped and that warmth had reduced seasonal demand.

He also pointed to front-loading of cargo movements ahead of tariffs, leaving stockpiles high across commodities and in his view, grain mattered but did not typically drive the market on its own.

On fleet supply, the panel addressed the orderbook as manageable by historical standards, but repeatedly returned to fleet age and efficiency differentials as the medium-term tightening mechanism.

Mr Pittas said orderbooks in Kamsarmax and Ultramax segments sat at about 14% and 12% respectively, which he characterised as “very reasonable” compared with the extreme orderbook levels seen before the 2010–2020 downturn.

Mr Petersen said the key uncertainty lay in scrapping timing, which remained limited while markets stayed firm, and he highlighted slow steaming as an additional variable affecting capacity.

Mr Norton said newbuilding prices looked “very expensive” given expected charter rates, and he said Star Bulk wanted to preserve debt capacity to renew its fleet when ships looked cheap and shipyards became more willing to discount.

In the Q&A, panellists said they did not expect major shipyard delivery delays, with Mr Fairclough describing consolidation and modernisation in Chinese shipbuilding and arguing that “we do not see major delays”.

Mr Pittas said he had become “a little bit more cautious about Chinese leasing” amid regulatory uncertainty, because comparable terms were available from conventional banks, although he noted some leasing houses appeared increasingly aggressive on pricing.

Closing remarks converged on the idea that the next disruption was more likely to come from a demand shock than from an abrupt oversupply.

Mr Fairclough said efficiency gaps between old and new tonnage, alongside regulatory pressure, looked set to push older ships out, while geopolitics remained the principal wild card.

Mr Norton said a large cohort of fuel-intensive ships delivered between 2007–2012 would move into scrapping age in a compressed window, and he argued shipyards would not have the capacity to replace that block quickly, raising the risk of future fleet tightness even if the market did not appear short today.

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