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Costamare steps in dry bulk shipping sector

Greek containership company Costamare has entered the dry bulk shipping market with the acquisition of 16 dry bulk vessels.

As disclosed, the new bulkers range between 33,000 and 85,000 dwt, with an average age of 10 years.

“We are pleased to announce the acquisition of dry bulk vessels. We have decided to invest in a liquid sector with strong fundamentals that provide enhanced return opportunities for our shareholders,” said Gregory Zikos, Costamare’s Chief Financial Officer.

Two of the ships have been delivered with the rest of the vessels expected to be delivered latest by January 2022.

According to the VesselsValue, the 63,600 dwt Ultramax bulk carrier, GH Seabird, was built in 2016 at Zhejiang East Coast Shipbuilding, China and is sailing under the Marshall Islands flag.

The other vessel, 83,500 dwt Panamax bulker, Spring Aeolian, was built in 2012 at Sanoyas shipyard in Japan, and is currently flying the Panama flag.

The bulkers will be managed through the existing platform headed and enriched by the dry bulk Onassis team, that will be joining the company in July, Costamare noted.

The acquisitions will initially be funded with cash on hand, and the boxship operator is in the process of arranging commercial bank debt. Considering the nature of the dry bulk business, the company plans to have low leverage of up to 60% of the value of the assets.

With this transformational deal underway, the company will expand its fleet to nearly 100 vessels.

In April 2021, Costamare acquired York Capital’s 60% equity interest, on average, in five 11,000 TEU containerships.

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These sixteen new vessels will add approximately 932,000 dwt to Costamare’s fleet. Meanwhile, its fleet of containerships includes 81 vessels with a total capacity of approximately 581,000 TEU.

Global dry bulk demand has seen a record-breaking start of the year, according to BIMCO’s latest report on dry bulk shipping.

Moreover, the first four months of 2021 have been record-breaking in terms of volume, with demand reaching 1.69 billion tonnes, the highest ever start to a year.

Compared with the same period in 2020, the volumes rose up to 6.1 per cent and went only slightly down from the 1.72 billion tonnes in the fourth quarter of 2020.

The strong start to the year for the high-volume commodities of iron ore and coal and thanks to infrastructure-heavy stimulus in some parts of the world, as well as plenty of agricultural exports, have all contributed to the record-high start, with strong volumes reflected in dry bulk earnings, according to the report.

In the future, the global dry bulk shipping market size is projected to reach $5066.3 million by 2026, from $4213.8 million in 2019, as revealed by the Dry Bulk Shipping Market Research Report 2021 published on Valuates Report.

Major factors driving the growth of dry bulk shipping market size are accelerating economic growth, higher urbanization, rising steel production, and growing coal industry, the report said.

On the contrary, the growth of high transportation and infrastructure costs along with the act of piracy and trading obstructions might hinder this growth.