In this episode of Capital Link’s Shipping Sector Webinar Series, we welcomed Mr. Aristides Pittas, Chairman & CEO at EuroDry Ltd. (NASDAQ:EDRY) and Euroseas Ltd. (NASDAQ:ESEA), Mr. Mads Petersen, COO of Pangaea Logistics Solutions Ltd. (NASDAQ:PANL), Mr. Hamish Norton, President at Star Bulk Carriers Corp. (NASDAQ:SBLK), and Mr. William Fairclough, Managing Director at Wah Kwong Maritime Services (UK) Company Limited. The webinar moderated by Mr. Liam Burke, Managing Director at B. Riley Securities, explored current opportunities, market dynamics, and strategic considerations within the dry bulk shipping sector.
To watch the full discussion, please visit the following link:
https://www.youtube.com/watch?v=-3Vnui6TGyY
A Mix of Spot and Time Charters
Mr. Fairclough outlined Wah Kwong Maritime Services, across Ultramax, Kamsarmax, and Capesize vessels. “Our choice of strategy between spot and the time charter would be very much linked to our view of the market and our risk management and overall exposure,” he said.
In turn, Mr. Pittas detailed EuroDry’s focus on the mid-sized dry bulk segments, including (Supramax, Ultramax, Panamax, Kamsarmax), avoiding the very smaller Handysize segment as well as the large Capesize vessels, which are typically tied to single-commodity trades. Star Bulk Carriers, with a fleet roughly split between Capesize, Kamsarmax/Post-Panamax, and Supramax/Ultramax vessels, is primarily spot. Mr. Norton cited two reasons for that. The first one would be shareholder desire for spot market exposure, and the second is the belief that, with a strong balance sheet, the spot market yields higher returns over time. Following its merger with Eagle Bulk Shipping, Star Bulk increased its exposure to Supramax and Ultramax vessels and has been selling older and smaller ships as it works toward a more balanced fleet.
On the other hand, Pangaea Logistics Solutions is adopting a model primarily focusing on its customers and operating in the sub-Cape segment. “We are pragmatic. It all depends on what the customer’s needs are at a certain time,” Mr. Petersen explained. Pangaea mainly uses voyage charter contracts and long-term COAs (Contracts of Affreightment) focused on niche business, mixing spot market activity with contracted cargoes.
Conservative Leverage
On balance sheet management, Mr. Pittas advocated for a medium leverage strategy, targeting approximately 50% loan-to-value. “Enough debt to remain resilient through a downturn,” he explained, while still sufficient to enhance equity returns in an operating environment that historically yields returns above the cost of debt. Mr. Fairclough also described a 50% net group leverage as a very comfortable level and noted the availability of generationally well-priced debt from aggressive Chinese leasing companies, which can be attractive for newer vessels with long-term contracts.
Mr. Petersen said Pangaea’s debt to fair market value is around 40-45%, a level with which they are very comfortable. Although debt is available on attractive terms, Star Bulk is not leveraging up at the moment. With net debt below scrap value, the company is focused on using its debt capacity to renew the fleet when ship prices become more attractive, while currently using cash flow to buy back stock.
2026’s Geopolitical Swings
The volatility of this past year was also discussed, with a weak first half and a stronger second. Mr. Petersen pointed to manageable growth and confidence from customer discussions, leading to a cautiously optimistic default position without expecting huge market moves.
Mr. Pittas acknowledged the inherent difficulty of forecasting, noting that Clarksons’ projections point to a modest market correction. However, he emphasized that, in the current environment, it’s increasingly about geopolitics rather than the traditional supply-and-demand calculus. His base case assumes freight rates broadly in line with current levels, with a potential variance of plus or minus 20%–25%.
On the more optimistic side of things remained Mr. Norton. “We are pretty optimistic, actually,” he said, anticipating continued strong volumes for coal, grain, and minor bulks. For iron ore, he expects increasing ton-miles due to longer haul Brazilian and Guinean supply, even if Chinese steel production respites.
On coal’s role, Mr. Fairclough noted current warm weather has dampened demand and built stockpiles. “A weaker coal market will definitely have a more negative impact on the market next year,” he cautioned. Nevertheless, while the market will move within a range, he expects to see some positive months in 2026.
Order Book and Fleet Age
The newbuild order book was viewed as manageable and a source of long-term strength for the sector. In fact, according to Mr. Pittas order book levels of approximately 14% for Kamsarmax and 11.5% for Ultramax, remain well within historical norms, particularly when contrasted with the near-100% order book levels seen ahead of the previous market downturn.
China: Nuanced Demand Beyond Real Estate
Chinese steel exports and the power demand from AI data centers are also supportive factors for iron ore and coal, respectively, said Mr. Norton. This shift in Chinese demand, where steel exports for global infrastructure now offset domestic real estate softness, is now creating beneficial long-haul shipping demand for raw materials and finished steel added Mr. Petersen.
Disclosure: Capital Link is the investor relations advisor to EuroDry Ltd. (NASDAQ:EDRY)/Euroseas Ltd. (NASDAQ:ESEA) and Star Bulk Carriers (NASDAQ:SBLK). This content is for informational purposes only and not intended to be investing advice. The article includes statements made by company management during the sector webinar.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
