Himalaya Shipping Q3 2026 Earnings Call Transcript
Himalaya Shipping (NYSE:HSHP) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.
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View the webcast at https://qcnl.tv/p/QlvX91uvJAnXGmjenwuN4A
Summary
Himalaya Shipping reported a significant increase in net profit to $33.3 million in Q3 2026, up from $9.5 million in Q3 2025, with EBITDA of $52.7 million.
The company secured new index-linked and fixed-rate charter agreements, achieving high premiums over the Baltic Capesize Index, and maintained a strong cash distribution of $0.75 per share for the quarter.
Management highlighted the continued strong market for Newcastlemax vessels, driven by increased iron ore and bauxite exports, notably from Guinea, and maintained a strategic focus on index-linked charters to capture market upsides.
Operationally, Himalaya Shipping’s fleet is among the top 1% for emissions, and the company has managed to maintain a 47% premium over the Baltic Capesize Index through efficient vessel operation.
The company expressed confidence in its current financing structure, citing a fixed bareboat rate under sale-leaseback arrangements and a favorable long-term outlook for shipping demand, with plans to adapt to market conditions as needed.
Full Transcript
OPERATOR
Welcome to Himalaya Shipping’s Q3 2026 financial results presentation. Today’s call is being recorded. If you have any objections, please disconnect at this time. For the first part of this call, all participants will be in a listen-only mode and afterwards there will be a question-and-answer session. To ask a question, please press five star on your telephone keypad. I will now turn the call over to CEO Lars-Christian Svensen. Please begin.
Lars-Christian Svensen (Chief Executive Officer)
Thank you, operator. Welcome to the Q3 2026 conference call for Himalaya Shipping. My name is Lars-Christian Svensen and I will be joined here today by our CFO, Vidar Hasund. Before we start the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These assumptions reflect the company’s current views regarding future events and are subject to risks and uncertainties. Actual results may differ materially from those anticipated.
I will now continue with the highlights of the quarter. We reported a net profit of $33.3 million and an EBITDA of $52.7 million. The time charter equivalent earnings for the quarter was approximately $58,400 per day. One new index-linked charter was concluded for the Mount Aconcagua for a period of 16 to 18 months at significant premium to the Baltic Capesize Index. We also converted four of our vessels from index-linked to fixed rate in the quarter: two vessels from August 1st until December 31st, 2026 at $51,200 per day and two vessels from 1st September 2026 until March 31st, 2027 at $53,000 per day.
Cash distributions for the quarter totaled $0.75. In subsequent events we achieved a time charter equivalent earnings for October 2026 of about $50,900 per day and we declared a dividend of $0.20 for the month. We also entered into new time charter agreements for another two vessels for a minimum period to October 1, 2027, with a three-year evergreen structure thereafter, at an index-linked rate, these ones as well, reflecting a significant premium to the Baltic Capesize Index.
And with that I will now pass the word to Vidar.
Vidar Hasund (Chief Financial Officer)
Thank you, Lars-Christian. Himalaya Shipping reported a net profit of $33.3 million, or $0.71 per share, for Q3 2026, compared with $9.5 million, or $0.21 per share, for Q3 2025. Operating profit was $45.4 million and EBITDA was $52.7 million, compared with $22 million and $29.3 million, respectively, in the same quarter last year. Operating revenues increased to $62.6 million from $37.9 million in Q3 2025. This was driven by higher daily time charter equivalent earnings which rose from $35,600 to …
Vessel operating expenses were $7.5 million, up $0.5 million from Q3 2025. The increase reflects the greater operational requirements for stores, spares and consumables as well as other cost increases. Average daily OpEx per vessel was $6,800. G&A expenses for the third quarter were $1.5 million compared with $1.1 million in Q3 2025. The increase reflected a consolidation of Peak Maritime Management, formerly named 2020 Bulkers Management. Interest expense was $12.3 million in Q3 2026, down $0.5 million from the same period in 2025. The decrease reflected a lower average outstanding loan principal following loan repayments. Cash and cash equivalents were $39.7 million at quarter end. The minimum cash requirement under a sale-leaseback financing is $12.3 million. The outstanding balance under this financing was approximately $681 million at the end of Q3, down from approximately $688 million at the end of Q2, reflecting scheduled repayments.
Cash flow from operations was $43.8 million for Q3 compared with $18.3 million for the same period in 2025. Himalaya Shipping has declared total cash distributions to shareholders of $0.75 per share for July, August and September 2026. That concludes the financial section. Back to you, Lars-Christian.
Lars-Christian Svensen (Chief Executive Officer)
Thank you, Vidar. Before I will guide you through our market section, here are some company updates. Our fleet of 12 modern Newcastle Maxes with dual-fuel LNG is in the top 1% emission rating for large bulk carriers. The attractive financing combined with a very clear capital allocation structure has led to 34 consecutive monthly cash distributions and dividends in Q3 2026. This amounts to $0.75. Our fleet is fixed out on long-term index-linked contracts with conversion options and the all-in cash breakeven equivalent to the Baltic Capesize Index is about $17,000 per day.
That is, every time you see the Baltic Capesize Index above $17,000, Himalaya Shipping is making money. Our preferred commercial strategy is still to charter our vessels out on index-linked charters. That allows us to capture the upside at each given market rise and also gives us good flexibility to convert to fixed rates with our solid counterparts. But we see value on the forward FFA curve. Currently, eight of our 12 ships are exposed to the spot market to capture what we believe will be a continued strong market for the Newcastlemax segment going forward.
To illustrate our fleet and commercial performance, we have the last three years traded at an average 47% premium to the Baltic Capesize Index and a 25% premium to our peers. This is achieved by the extra cargo intake on our vessels and top-tier speed and consumption design on our fleet. With the current structure we are able to navigate this volatile market and able to turn our position quickly from long to short or vice versa should we see a clear trend.
Here we can see our dividend capacity based on various rate scenarios for a standard Capesize vessel. When the Baltic Capesize Index trades around $40,000 per day, the company will yield about 18%. When we see moves to around the $60,000 per day range we will produce a yield of around 34%. And when we see $100,000 per day on the Baltic Capesize Index, Himalaya will yield close to 65% on the current share price. Now let’s move to the market section. We are currently experiencing historical heights in the Capesize and Newcastlemax market. So far to date the Baltic Capesize Index has averaged about $33,500 per day. Iron ore imports to China are at an all-time high for the season and the continued flows from Guinea with bauxite and now also iron has been key drivers to maintain momentum. The structural ton-mile change in the Capesize and Newcastlemax trades over the last few years has proven capable of lifting the market floor to a new level.
Ton-mile in Q3 for Capesize and Newcastlemax increased 1.6% year over year. The bauxite volumes from Guinea contributed a 26.6% upswing year over year and continue to be an integral part of the ton-mile structural increase for the large bulk segment. Looking at pure export data, year over year, Q3 iron ore exports from Brazil were down 6% and the Australian iron ore exports had an increase of 2% in the same period. The Brazilian export reduction has been neutralized by the rapid increase of Guinea iron ore exports which we will discuss in more detail later in the presentation. The global iron ore exports are continuing to increase. To put this in perspective, the Chinese seaborne iron ore imports hit record heights for the quarter, as you can see on the top right graph.
This again emphasizes the Chinese hunger for high-grade iron ore which can only be found outside the country’s borders. In addition, the Chinese imported iron ore inventories are down from the peak and now below the 12-month average in the same period. As we have discussed in previous reports, the domestic Chinese iron ore content is reported to be around 15%, but the imported volumes from Brazil and Guinea contain an iron ore content of mid to high 60s.
This has led to a slowdown in domestic Chinese production and higher-grade iron ore from overseas still remains a preference. For those of us that love rocks, bauxite must surely be the favorite. After a record bauxite output from Guinea in 2025, new export records have been registered so far in 2026, which you can see from the left graph. In conjunction with the increasing volumes departing the country you can also see that the bauxite is taking over more market share from the other commodities and is now responsible for 17% of the total cargo transported on Capes and Newcastlemaxes.
This plays directly into the structural ton-mile story that we see unfolding and that we believe will be a driver for years to come. The Simandou mine, which we have discussed extensively in many quarterly reports, has picked up the pace rapidly after the summer. The mine is scheduled to export 25 million tonnes by the end of the year, 60 million metric tonnes is expected in 2027, 90 million in 2028, and target exports remain at 120 million tonnes of high-grade iron ore per annum to the market within 2030.
In conclusion, another fronthaul leg has been established from the Atlantic for the Capesize and Newcastlemax trade contributing to longer distances for an already stretched. We have seen from other segments that order books can increase quickly. However, in Capesize and Newcastlemax this has been a slower-moving operation. We currently observe an 18% order book of the total existing Capesize fleet. The active shipyards are still preferring to build tankers, LNG carriers, container and car carriers to maximize profit margins and the availability for Newcastlemax newbuildings at a reputable shipyard is now achievable in 2029.
As a comparison to other shipping segments, you can see from the right graph that the Capesize order book-to-fleet ratio is still the most compelling in the large shipping space. We also continue to see a significant increase in dry docks due to mandatory special surveys required on merchant vessels every five years. 12% of the entire Capesize fleet was delivered in 2011 and will have to undergo a 15-year special survey in 2027. There will be 5- and 10-year special surveys as well, meaning around 20% of the total Capesize and Newcastlemax fleet will be competing for dry dock space in 2027.
In addition to the low order book and the dry dock scenario looming, the current Capesize and Newcastlemax fleet is aging fast. Around 46% of the total fleet was built between 2009 and 2015. That means that 25% of the fleet will be over 20 years of age in 2030. As of now, we have visibility of undersupply for the next three years, making it difficult to add any meaningful large dry bulk capacity in time to deal with the rapidly aging fleet and the additional strong vessel demand from the market.
Thank you very much and I will now pass the word back to the operator and welcome any questions you might have.
OPERATOR
Thank you. If you do wish to ask a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. We will have a brief pause while questions are being registered. The first question is from the line of Klimin Molief from Edge Investors. Please go ahead. Your line will now be unmuted.
Klimin Molief (Analyst)
Hi, good afternoon and thank you for taking my questions. We’ve seen iron ore prices decline in recent months. As Simandou continues to ramp up, available volumes are likely to increase further. You talked about Chinese domestic iron ore production coming under pressure given its lower grade. Do you expect this trend to continue going forward or are we approaching a level where the government may be incentivized to maintain production due to strategic considerations?
Lars-Christian Svensen (Chief Executive Officer)
Hi there. Thank you for your question. We believe this is a structural change with the Simandou mine. The Chinese government along with the consortium has spent a significant amount of time and money developing this project, and I would say over 90% of the current volumes are going to China. So we look at this as a long-term project, and naturally if something has to give in the current climate, even with, I know, prices around $90 per tonne, it still makes good sense for China to import the volumes from Simandou.
And also remember we are at a point now where we have fairly high fuel prices. If you just look at the freight, for example, from Brazil to China CFR, the freight amounts to between 35% and 40% compared to last year where it was closer to 20%. So we think also if we see any peace in the Middle East or a bit more normal markets to trade in with lower fuel prices, this will also boost the appetite for more seaborne iron ore volumes into China.
Vidar Hasund (Chief Financial Officer)
I think we are at current LTV of, based on broker values, 57%, and we are paying a fixed bareboat rate under those financings, which implies a fixed rate of just below 7%. I think we’ve seen interest rates increasing a bit the last couple of months. It’s probably come down a bit now again. I think we see margins going a bit lower. But I think the profile we have under those sale-leaseback arrangements is very good. So I think if you would refinance, you wouldn’t get typically as good a profile. It would be age-adjusted. So I think we are evaluating that on a running basis, but I think the financing we have today is very good and we are happy with that.
OPERATOR
Thank you. The next question is from the line of David Latinas from Norske Bank. Please go ahead. Your line will now be unmuted.
David Latinas (Analyst)
Hi. Hi, guys. Thank you for taking my questions. I’m just looking into the Q1. Are you comfortable staying mostly spot into Q1, or do you expect to cover some more of your fleet? But still historically a pretty decent market.
Lars-Christian Svensen (Chief Executive Officer)
Hi there. Thank you for your question. In Q1 we will have two of our 12 vessels covered at well over $50,000 per day. With the current Q1 trading at above $30,000 per day today, it’s still something that we’re considering every single day. We’re quite happy with the spot exposure that we have now and we don’t see any immediate need to take more cover. But obviously if we see some value on the forward curve, we’re not a stranger to execute on that as we see fit.
But it’s more about identifying the peaks and the short-term peaks in this market than to just take cash off the table simply because it’s good money. So hopefully we’re able to execute on that in the shareholders’ favor and we will keep on focusing on that going into Q1 and also next year.
David Latinas (Analyst)
That makes sense. How much of an impact do you think the current strong El Niño could have on the Q1 normal seasonality?
Lars-Christian Svensen (Chief Executive Officer)
I think for the larger sizes it’s looking very promising. If Brazil has a drier spell than what they’re used to, that will obviously bode well for the iron ore exports. Coming into Q1 now that we have the bauxite volumes, which is the high season there, plus also Simandou volumes coming on stream rapidly, fast, I think Q1 can continue to surprise us on the upside, especially if the weather is dry.
David Latinas (Analyst)
Okay, thank you. I’ll return to the queue.
OPERATOR
Thank you. Let me just remind you that if you do have a question, please press five star on your telephone keypad. It does not appear as if we have any further questions, so I’ll hand back to the speakers.
Lars-Christian Svensen (Chief Executive Officer)
Thank you very much everyone for dialing in and we’ll speak to you again next quarter. Thank you.
OPERATOR
Thank you. Welcome to Himalaya Shipping’s Q3 2026 financial results presentation. Today’s call is being recorded. If you have any objections, please disconnect at this time. For the first part of this call, all participants will be in a listen-only mode and afterwards there will be a question and answer session. To ask a question, please press five star on your telephone keypad. I will now turn the call over to CEO Lars-Christian Svensen. Please begin.
Lars-Christian Svensen (Chief Executive Officer)
Thank you, operator. Welcome to the Q3 2026 conference call for Himalaya Shipping. My name is Lars-Christian Svensen and I will be joined here today by our CFO, Vidar Hasund. Before we start the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These assumptions reflect the company’s current views regarding future events and are subject to risks and uncertainties. Actual results may differ materially from those anticipated.
I will now continue with the highlights of the quarter. We reported a net profit of $33.3 million and an EBITDA of $52.7 million. The time charter equivalent earnings for the quarter was approximately $58,400 per day. One new index-linked charter was concluded for the Mount Aconcagua for a period of 16 to 18 months at significant premium to the Baltic Capesize Index. We also converted four of our vessels from index-linked to fixed rate in the quarter: two vessels from August 1st until December 31st, 2026 at $51,200 per day, and two vessels from 1st September 2026 until March 31st, 2027 at $53,000 per day.
Cash distributions for the quarter totaled $0.75. In subsequent events, we achieved a time charter equivalent earnings for October 2026 of about $50,900 per day, and we declared a dividend of $0.20 for the month. We also entered into new time charter agreements for another two vessels for a minimum period of 10-01-2027 with a three-year evergreen structure thereafter at an index-linked rate, these ones as well reflecting a significant premium to the Baltic Capesize Index. And with that I will now pass the word to Vidar.
Vidar Hasund (Chief Financial Officer)
Thank you, Lars-Christian. Himalaya Shipping reported a net profit of $33.3 million, or $0.71 per share, for Q3 2026 compared with $9.5 million, or $0.21 per share, for Q3 2025. Operating profit was $45.4 million and EBITDA was $52.7 million compared with $22 million and $29.3 million respectively in the same quarter last year. Operating revenues increased to $62.6 million from $37.9 million in Q3 2025. This was driven by higher daily time charter equivalent earnings, which rose from 35,600 to—.
Vessel operating expenses were $7.5 million, up $0.5 million from Q3 2025. The increase reflects the greater operational requirements for stores, spares and consumables, as well as other cost increases. Average daily OpEx per vessel was $6,800. G&A expenses for the third quarter were $1.5 million compared with $1.1 million in Q3 2025. The increase reflected a consolidation of Peak Maritime Management, formerly named 2020 Bulkers Management. Interest expense was $12.3 million in Q3 2026, down $0.5 million from the same period in 2025.
The decrease reflected a lower average outstanding loan principal following loan repayments. Cash and cash equivalents were $39.7 million at quarter-end. The minimum cash requirement under a sale-leaseback financing is $12.3 million. The outstanding balance under this financing was approximately $681 million at the end of Q3, down from approximately $688 million at the end of Q2, reflecting scheduled repayments. Cash flow from operations was $43.8 million for Q3 compared with $18.3 million for the same period in 2025. Himalaya Shipping has declared total cash distributions to shareholders of $0.75 per share for July, August and September 2026.
That concludes the financial section. Back to you, Lars-Christian.
Lars-Christian Svensen (Chief Executive Officer)
Thank you, Vidar. Before I guide you through our market section, here are some company updates. Our fleet of 12 modern Newcastlemaxes with dual-fuel LNG is in the top 1% emission rating for large bulk carriers. The attractive financing combined with a very clear capital allocation structure has led to 34 monthly consecutive cash distributions, and dividends in Q3 2026 amount to 75 cents. Our fleet is fixed out on long-term index-linked contracts with conversion options, and the all-in cash breakeven equivalent to the Baltic Capesize Index is about $17,000 per day.
That is, every time you see the Baltic Capesize Index above $17,000, Himalaya Shipping is making money. Our preferred commercial strategy is still to charter our vessels out on index-linked charters. That allows us to capture the upside at each given market rise and also gives us good flexibility to convert to fixed rates with our solid counterparts where we see value on the forward FFA curve. Currently, eight of our 12 ships are exposed to the spot market to capture what we believe will be a continued strong market for the Newcastlemax segment going forward.
To illustrate our fleet and commercial performance, we have the last three years traded at an average 47% premium to the Baltic Capesize Index and a 25% premium to our peers. This is achieved by the extra cargo intake on our vessels and top-tier speed and consumption design on our fleet. With the current structure we are able to navigate this volatile market and able to turn our position quickly from long to short or vice versa should we see a clear trend.
Here we can see our dividend capacity based on various rate scenarios for a standard Capesize vessel. When the Baltic Capesize Index trades around $40,000 per day, the company will yield about 18%. When we see moves to around the $60,000 per day range, we will produce a yield of around 34%. And when we see $100,000 per day on the Baltic Capesize Index, Himalaya will yield close to 65% on the current share price. Now let’s move to the market section.
We are currently experiencing historical heights in the Capesize and Newcastlemax market. So far to date the Baltic Capesize Index has averaged about $33,500 per day. Iron ore imports to China are at an all-time high for the season, and the continued flows from Guinea with bauxite and now also iron have been key drivers to maintain momentum. The structural tonne-mile change in the Capesize and Newcastlemax trades over the last few years has proven capable of lifting the market floor to a new level.
Tonne-miles in Q3 for Capesize and Newcastlemax increased 1.6% year over year. The bauxite volumes from Guinea contributed a 26.6% upswing year over year and continue to be an integral part of the tonne-mile structural increase for the large bulk segment. Looking at pure export data year over year, Q3 iron ore exports from Brazil were down 6%, and the Australian iron ore exports had an increase of 2% in the same period. The Brazilian export reduction has been neutralized by the rapid increase of Guinea iron ore exports, which we will discuss in more detail later in the presentation.
The global iron ore exports are continuing to increase. To put this in perspective, the Chinese seaborne iron ore imports hit record heights for the quarter as you can see on the top right graph. This again emphasizes the Chinese hunger for high-grade iron ore which can only be found outside the country’s borders. In addition, the Chinese imported iron ore inventories are down from the peak and now below the 12-month average in the same period. As we have discussed in previous reports, the domestic Chinese iron ore content is reported to be around 15%, but the imported volume from Brazil and Guinea contains an iron ore content of the mid to high 60s. This has led to a slowdown in domestic Chinese production, and higher grade iron ore from overseas still remains a preference.
For those of us that love rocks, bauxite must surely be the favorite. After a record bauxite output from Guinea in 2025, new export records have been registered so far in 2026, which you can see from the left graph. In conjunction with the increasing volumes departing the country, you can also see that the bauxite is taking over more market share from the other commodities and is now responsible for 17% of the total cargo transported on Capes and Newcastlemaxes.
This plays directly into the structural tonne-mile story that we see unfolding and that we believe will be a driver for years to come. The Simandou mine, which we have discussed extensively in many quarterly reports, has picked up the pace rapidly after the summer. The mine is scheduled to export 25 million tonnes by the end of the year; 60 million metric tonnes is expected in 2027; 90 million in 2028; and target exports remain at 120 million tonnes of high-grade iron ore per annum to the market within 2030.
In conclusion, another fronthaul leg has been established from the Atlantic for the Capesize and Newcastlemax trade, contributing to longer distances for an already stretched and aging fleet. We have seen from other segments that orderbooks can increase quickly. However, in Capesize and Newcastlemax this has been a slower-moving operation. We currently observe an 18% orderbook of the total existing Capesize fleet. The active shipyards are still preferring to build tankers, LNG carriers, container and car carriers to maximize profit margins, and the availability for Newcastlemax newbuildings at a reputable shipyard is now achievable in 2029 at the earliest. As a comparison to other shipping segments, you can see from the right graph that the Capesize orderbook-to-fleet ratio is still the most compelling in the large shipping space. We also continue to see a significant increase in dry docks due to mandatory special surveys required on merchant vessels every five years.
Twelve percent of the entire Capesize fleet was delivered in 2011 and will have to undergo a 15-year special survey in 2027. There will be 5- and 10-year special surveys as well, meaning around 20% of the total Capesize and Newcastlemax fleet will be competing for dry dock space in 2027. In addition to the low orderbook and the dry dock scenario looming, the current Capesize and Newcastlemax fleet is aging fast. Around 46% of the total fleet was built between 2009 and 2015.
That means that 25% of the fleet will be over 20 years of age in 2030. As of now, we have visibility of undersupply for the next three years, making it difficult to add any meaningful large dry bulk capacity in time to deal with the rapidly aging fleet and the additional strong vessel demand from the market. Thank you very much, and I will now pass the word back to the operator and welcome any questions you might have.
OPERATOR
Thank you. If you do wish to ask a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. We will have a brief pause while questions are being registered. The first question is from the line of Klimin Molief from Edge Investors. Please go ahead. Your line will now be unmuted.
Klimin Molief (Analyst)
Hi, good afternoon, and thank you for taking my questions. We’ve seen iron ore prices decline in recent months. As Simandou continues to ramp up, available volumes are likely to increase further. You talked about Chinese domestic iron ore production coming under pressure, given its lower grade. Do you expect this trend to continue going forward, or are we approaching a level where the government may be incentivized to maintain production due to strategic considerations?
Lars-Christian Svensen (Chief Executive Officer)
Hi there. Thank you for your question. We believe this is a structural change with the Simandou mine. The Chinese government, along with the consortium, has spent a significant amount of time and money developing this project, and I would say over 90% of the current volumes are going to China. So we look at this as a long-term project and, naturally, if something has to give at the current climate, even with iron ore prices around $90 per ton, it still makes good sense for China to import the volumes from Simandou.
And also remember, we are at a point now where we have fairly high fuel prices. If you just look at the freight part, for example from Brazil to China CFR, the freight amounts to between 35% and 40%, compared to last year where it was closer to 20%. So we think also if we see any peace in the Middle East or a bit more normal markets to trade in with lower fuel prices, this will also boost the appetite for more seaborne iron ore volumes into China.
Klimin Molief (Analyst)
Makes sense. That’s full color, and this is maybe a longer-term question, but I wanted to ask about your financing. When you secured those sale-and-leasebacks, pricing was simply excellent. But as you look at the LTV based on current asset valuations, is there maybe any appetite to refinance your existing indebtedness over the coming year or two years?
Vidar Hasund (Chief Financial Officer)
I think we are at current LTV of, based on broker values, 57%, and we are paying a fixed bareboat rate under those financing, which implies a fixed rate of just below 7%. I think we’ve seen interest rates increasing a bit in the last couple of months. It’s probably come down a bit now again. I think we see margins going a bit lower, but I think the profile we have under those back arrangements is very good. So I think if you would refinance, you wouldn’t get typically as good a profile.
It would be age-adjusted. So I think we are evaluating that on a running basis, but I think the financing we have today is very good, and we are happy with that.
Klimin Molief (Analyst)
No argument there. Thank you. I’ll throw it over.
OPERATOR
Thank you. The next question is from the line of David Latinas from North Bank. Please go ahead. Your line will now be unmuted.
David Latinas (Analyst)
Hi. Hi, guys. Thank you for taking my questions. I’m just looking into Q1. Are you comfortable staying mostly spot into Q1, or do you expect to cover some more of your fleet in what’s still historically a pretty decent market?
Lars-Christian Svensen (Chief Executive Officer)
Hi there. Thank you for your question. In Q1 we will have two of our 12 vessels covered at well over $50,000 per day. With the current Q1 trading at about $30,000 per day today, it’s still something that we’re considering every single day. We’re quite happy with the spot exposure that we have now, and we don’t see any immediate need to take more cover. But obviously if we see some value on the forward curve, we’re not a stranger to execute on that as we see fit.
But it’s more about identifying the peaks and the short-term peaks in this market than to just take cash off the table simply because it’s good money. So hopefully we’re able to execute on that in the shareholders’ favor, and we will keep on focusing on that going into Q1 and also next year.
David Latinas (Analyst)
That makes sense. How much of an impact do you think the current strong El Niño could have on the Q1 normal seasonality?
Lars-Christian Svensen (Chief Executive Officer)
I think for the larger sizes it’s looking very promising. If Brazil has a drier spell than what they’re used to, that will obviously bode well for the iron ore exports coming into Q1. Now that we have the bauxite volumes, which is the high season there, plus also Simandou volumes coming on stream rapidly, fast, I think Q1 can continue to surprise us on the upside, especially if the weather is dry.
David Latinas (Analyst)
Okay, thank you.
Lars-Christian Svensen (Chief Executive Officer)
Thank you.
OPERATOR
Let me just remind you that if you do have a question, please press five star on your telephone keypad. It does not appear as if we have any further questions, so I’ll hand back to the speakers.
Lars-Christian Svensen (Chief Executive Officer)
Thank you very much, everyone, for dialing in, and we’ll speak to you again next quarter. Thank you. Thank you.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.