Okay, we're ready to get started now with our next presentation. We're honored to have Genco Shipping, symbol is GNK, listed on the New York, with about a $600 million market cap. Company's represented today by CEO John Wobensmith and CFO Peter Allen. Genco is one of the largest dry bulk shipping companies with a fleet of capesize vessels and also midsize ships as well. Company's probably, I would say, the lowest levered, lowest financially levered.
Yeah.
Company in our coverage, giving it plenty of flexibility to kind of work through basically the strategic opportunities that the company has. It also has a very unique capital allocation policy that I'm sure the company will be talking about. So I'll pass it off to you, John.
Great. Thanks, Omar. All right. Okay, as Omar said, I am John Wobensmith, the CEO. With me today is Peter Allen, our Chief Financial Officer. Both of us have many, many years of experience in shipping and dry bulk in particular. Taking a look at Genco, so we are the largest U.S.-based dry bulk shipowner. We have 44 ships on the water today, consisting of capesize vessels, which are predominantly carrying iron ore and coal, and then our midsize vessels, our ultramax, supramax vessels, which are carrying a whole host of commodities such as cement, sugar, gypsum, steel products, really runs the gamut.
We believe in having direct exposure to all of the dry bulk trades, which is why we like having the larger ships on the iron ore front, but then the midsize ships for the rest of the commodities. We have created a full-service logistics commercial platform, where we are charging our customers on a per-ton basis and doing everything to get the commodity from point A to point B. What that allows us to do is to have that direct relationship with our customer, but also create alpha over and above the published benchmarks, and we've been able to do that consistently for the last four years. We've created a very optimized risk-return profile by paying off 66% of our debt over the last couple years.
We've put in place a high dividend payout model, which, because of paying down all that debt, we're down to a net leverage of about 10%, allows our cash flow breakeven to be very low so that we can pay dividends consistently, no matter what the market may throw at us. Transparent U.S. filer. We have been rated number one on the ESG front by Webber, and that's been consistent for three years, and that is all-encompassing of 64 shipping companies, not just dry bulk, but across the board: tankers, gas, containers, and dry bulk. New York Stock Exchange-listed company, ticker symbol's GNK. On the capital allocation side, again, very strong balance sheet, $54 million of cash, $207 million of undrawn revolver.
We do manage our cash in the sense that, we have a very large revolver, so we don't feel the need to keep excessive amounts of cash on the balance sheet, particularly with where interest rates are today. So our liquidity is a little more than $260 million, and as I said before, we've paid down, almost $300 million of debt since 2021. The Value Strategy, which is, which is what we refer to our dividend and low-leverage model, we did pay a $0.15 dividend in, in Q2. We've declared 16 consecutive quarterly dividends, so we have paid a dividend consistently for the last four years, albeit variable, but we're the only company in the peer group that have paid a dividend every quarter for the last four years.
Debt outstanding and our net loan-to-value is 11% today. Real quick on the industry, this is a nice snapshot of the global dry bulk trade routes, showing iron ore, coal, grain, and the minor bulk trade routes. What I would focus you on is particularly the iron ore trades in red, the trade going from Brazil to China, and then the trade going from Australia to China. Those are the two major dry bulk trades on the iron ore front. That Brazilian trade has a tremendous amount of operating leverage because it takes ships out of the market for 90 days- plus, where the Australia trade is usually about a 40- to 45-day round voyage.
The other thing I would point out on this, and, and Pete is gonna talk a little bit about this, is the dislocation because of the war in Ukraine, particularly on the coal front. With, with Europe not importing Russian coal anymore, they are having to bring it from longer distances, which has actually been very helpful to, to the dry bulk trades from a ton- mile standpoint. Taking a look at what we moved as a company in 2022, iron ore, 41%, obviously our largest commodity, and as I said, those are being moved on the larger ships, the capesize vessels. Met coal for the steel industry, thermal coal for power generation, combined, 22%. And then we get into grains at 10%, and then the other minor bulk commodities sort of tick down in, in the 8%-3%.
Important to note that dry bulk trade is basically half of the total seaborne trade volumes when you take into account containers, oil, and gas, so it's a very important part of the global commodity trades. Global grain, this is also, as I said, 10%. It's a key component of our business. This is mostly moved on the mid-sized vessels, our ultramax and supramax vessels. It is the third largest commodity. A 20% of our commodities in our minor bulk fleet were grain-related. The Black Sea has been one of the biggest topics on the grain trade. There obviously was a grain corridor established over the last two years, but that has been pulled, and we are now coming into what would be deemed peak season normally for the Black Sea trade.
So we're optimistic that something is going to get renegotiated, and there are steps that are at least talks that are taking place at this point. Having said that, Brazil has had a bumper crop on the corn front, so it's been able to make up for a lot of those lost tons that would have been coming out of the Black Sea. Taking a look at a macro and the current dry bulk trends, and this is probably one of the most important slides in the deck, and that is the order book, which is on the far left, or the supply side of the equation. The dry bulk markets are balanced by supply, meaning number of ships that are on the water available to move commodities, and then the demand side, which, you know, is obviously the demand for the commodities themselves.
We are at a historical low for an order book at 7.8%, which means today, if you order a ship, because there is not a lot of yard capacity because the slots have been taken up by other vessels such as tankers, container ships, and gas, that order book is low, and if you're ordering today, you really can't get delivery of a ship until 2026 at this point. So when you look at that order book, you just don't need much incremental demand growth on an annual basis to continue to outstrip the supply side. And if you look at the fleet overall, you have 8% of the existing fleet that is 20-year-old and older, which are prime candidates for scrap. So the order book is very well matched with basically fleet renewal or scrapping going forward.
On the environmental front, this has also put a ceiling on, on the ability to order ships. There's a lot of conversations about what the fuel of the future will be. Will it be ammonia? Will it be methanol? Will it be hydrogen to a lesser degree? So it's very hard as a ship owner to make a decision to order a conventional fueled ship today, not knowing if it's going to be obsolete or just too expensive 10-15 years and will never be able to get to its actual useful life of 20-25 years. China, obviously huge focus for this industry. There is continued stimulus. We think it is going to have to be ramped up even more. There is obviously a lot of negative sentiment on China.
What I will tell you is, what you don't see in the news is that iron ore and coal volumes are actually doing very well. What has happened to dry bulk shipping is an unwinding on the congestion side because the container industry has fallen off. But also, some of the more ancillary trades, such as iron ore going from Brazil into Europe and some of the more minor bulk trades, have actually kept rates down. But China in general, again, even with the negative news flow, the iron ore and coal volumes are pretty good. And we're seeing that, and we expect more growth, particularly out of Brazil, as Vale has recovered from the dam incident that they had in early 2019. They really are just getting their volumes back now to those levels.
Then Ukraine, which I spoke about before, we have seen ton-mile expansion on the coal front, but the grain corridor is not available at this point. So it is going to be interesting to see, particularly as we're coming into what would normally be a peak season for grains. But as I also mentioned, Brazil has been able to make up some of that. Very quickly on this slide, we have a barbell approach. As I said, we believe very strong in having direct exposure to the commodities that are moved on dry bulk trade routes. So we have the larger ships, the capesize vessels, which do tend to be more volatile because of that iron ore trade going into China.
Then we have the mid-size vessels, which are more stable earnings, but we've also built a very robust commercial trading platform around that minor bulk fleet to allow us to use that platform to create alpha and generate additional EBITDA. I think we generated $40 million last year, just above the indices, because of that commercial platform. In terms of our risk-reward model, and Pete is going to talk more in detail on this, there's a tremendous amount of operating leverage built into this fleet.
And if we go to the next slide, you'll see that what we believe is having the lower financial leverage, lower financial risk, is the best model going forward, particularly for a dividend payer, so that you can consistently pay a dividend on a quarterly basis, albeit variable, but no matter what the market throws at you, and we can always play offense. And what I mean by that is if we're in a low market, such as we are today, we can continue to pay a dividend, but we can also look at fleet renewal and acquiring vessels at attractive prices. As the market moves up, obviously that dividend moves up in a substantial way. And on the ESG front, as I said before, number one ranked public shipping company by Webber Research for the last three years in a row.
And that focus is not just on the environment, but obviously social sustainability and real important on the governance side. We're one of only two in the peer group that are U.S. filers. There's no related party transactions, which unfortunately does tend to be something that happens across the shipping industry, and we have an independent Board of Directors. So with that, I'm going to turn it over to Pete to go through our Value Strategy.
Great. Thank you, John. So when we look at Genco's approach to capital allocation, it's really predicated on three main pillars, which are significant dividends, financial de-leveraging, as well as our growth strategy. I'll talk about dividends on the next couple slides, but on financial de-leveraging, we have a net loan to value of approximately 11%, and we've paid down 2/3 of our debt essentially over the last two and a half years. On the growth side, over the last five years, we've invested about $435 million in renewing our fleet. Over the last three years, about $150 million, primarily focused on that core ultramax sector, the minor bulk sector, that we've expanded in significantly over that time. Regarding our dividend history, as John mentioned, we've paid a dividend for four years straight, consecutively.
No other dry bulk peer of ours can make that claim, so that's a big positive that we view our you know our capital allocation approach and our discipline has really paid off from the prudence of paying down debt on a voluntary basis, and we have no maturities. We have no mandatory debt repayments until maturity of the facility in 2026. So we have actually paid in dividends about 1/3 , a little bit more than 1/3 of our share price currently, so significant yield over that period of time. And this is our quarterly dividend framework.
So it's essentially operating cash flow on a quarterly basis, which makes it variable, given the volatility and cyclicality of the business, less a voluntary debt repayment, less mandatory CapEx, as well as a reserve. And the company is committed to paying a dividend despite market conditions, so we can adjust the reserve accordingly, and we've done that the last couple of quarters. But the company is very focused on the dividend and capital allocation policy, and it's something that we've committed to, and we're nearly two years into it and continue to do it going forward. This is our industry low break-even. So having paid down all of the debt that we have, our break-even is well under $10,000 per vessel per day, and if you take out dry dock and CapEx, we're at about $8,300.
So very low cash flow break-even that enables us to, like John said, play offense in almost any market environment. Speaking of the market, this is where we currently are on a freight rate perspective. So roughly $10,000-$11,000 on capesize, as well as supramax vessels. Capesize vessels have been outperforming most of the year up until recently, whereas supramax rates have been picking up quite significantly over the last few weeks. China, obviously, it's a huge part of the business. They import 75% of iron ore. Iron ore is 30% of dry bulk trade, so that's obviously a huge part of our business and the capesize vessels in particular. China really recovered nicely in Q1. Their PMI was in expansionary territory.
It was almost a little bit too fast, too soon, so China pulled back on the stimulus a little bit prematurely in Q2. So we saw the PMI go back into contractionary territory. We saw lending contract, and while PMI numbers are still in contractionary territory, they have increased each of the last three months. Last month, they actually exceeded expectations. So slowly but surely, those numbers are starting to get better. On the iron ore and steel complex, so China produces about half of global steel production, and they've also, t hey import about 75% of global iron ore, and they have significantly drawn down their stockpiles over the last year. So they're 40 million tons below where they were at the peak of last year.
So what that means, we're in, we're in a period of time where iron ore, seaborne iron ore is actually at its height in terms of availability. So we think that China's going to restock inventories in Q4 ahead of what is typically a tighter supply side situation in the first half of the following year. With global steel production, so China and India have really been leading in terms of output overall. They've seen, they've seen growth of 2.5%-9% in India's case. On the steel production side, it's really been ex-China, ex-India, where steel production has actually been contracting. And positively, last month, actually, in, in July, we saw the first ex-China increase in steel production that we've seen in over two years.
So, you know, we, we've seen Europe, in particular, they're down 10% in terms of steel production, and some other countries as well. So it's positive to see ex-China steel production actually slightly increase in the month of July, and hopefully, that can help those secondary and tertiary trades on the minor bulk side, in particular, as well as capes going forward. On the grain, as John alluded to, the Black Sea grain season, this would typically in Q3 be peak wheat export season out of Ukraine. We're obviously not seeing those volumes, but Russia is exporting significant volumes on the wheat side. But, you know, we're also in a, in peak Brazilian corn season, and we've seen quite a, quite a significant increase in those cargo flows on the grain side.
Really, the crux of the overall thesis in terms of the dry bulk investment case is the supply side. The order book is at a historical low. As we see here, the order book as a percentage of the fleet is under 8%. Vessels that are on the water that are 20 years or older are over 8% of the fleet, really implying net neutral fleet growth, almost no fleet growth. But what we've seen lately, although the volumes, as John mentioned, are strong into China on both coal and iron ore, there's been an unwinding of congestion, which has increased effective capacity of the fleet. So that's having a temporary impact in terms of the overall freight rate market right now.
But very bullish supply side story, and when you look historically at demand growth, demand growth in dry bulk can be, you know, the last 25 years, it's about 4% CAGR on average. It, it's linked to global GDP, so if you put 2%-3%, demand growth, let's say, but with a 1%-2% net, supply growth, you know, demand growth is still exceeding supply, tightening fleet-wide utilization, and pushing freight rates higher. So it's still a very positive story on the supply and demand fundamentals. Overall, putting things together, you know, going into next year, as well as 2025, there is a really low supply side setup, with capacity constraints, environmental regulations, low yard capacity.
We do anticipate that demand growth will exceed supply growth over the next few years and the foreseeable future. With that, I'll turn it over to John Wobensmith.
Great. Thanks, Pete. Okay, so on the leadership front, obviously the management team is U.S.-based here in New York. An incredible amount of long-term experience and very high corporate governance standards, particularly with the U.S. filer status. Our Value Strategy, we do think this is the best risk-reward model in dry bulk shipping, with the low leverage and the high dividend payout, and the commitment to that dividend, albeit variable and based on cash flows. Best-in-class commercial platform. We've created alpha and outperformed our benchmarks for four years in a row, but we also really believe in that active management and being direct with our customers in order to provide a full-service logistics solution to move their commodities. In terms of the fleet, we have the barbell approach.
Again, we believe very strongly in the capesize and the mid-size sector, both from an operating standpoint and having that direct exposure to all the commodities. But we also think it is key from a valuation standpoint on the equity to have those large ships with the volatility so that you have that, that upside built in. The one thing I'll mention on that, you saw the numbers, on where capes are, which is about $8,000 a day, and supramaxes are about at eleven. We are in a situation where Q4 is showing almost a doubling of that in contango, if you look at the freight forward curve, it's about $15,000-$16,000 a day for Q4.
So the market is anticipating anyway, that iron ore will flow more, and that we'll start to have a recovery on the commodity front globally. Dry bulk market, as Pete said, the supply side, it is the most important theme that is in place right now, for continued rising of dry bulk rates. It, you just don't need much incremental demand in order to outstrip supply. And, the one thing I'll also say, in general in the market, what always hurts dry bulk shipping is the supply side. People tend to overbuild as rates really move up, and we haven't seen that this time around because of the lack of yard space and the environmental regulations that are really keeping a ceiling on ordering conventional-fueled ships.
Whereas demand shocks over the years that we've seen tend to be very, very short-lived and recover quickly. So we're probably, I would say, two quarters into what I would call a demand shock, but we think that is really going to start to right itself, as China can, you know, imports more iron ore and coal, starts to recover with some of the other commodities, and hopefully we'll start to see Europe recover as well. So thank you very much. Omar, thank you very much for having us.
[audio distortion] Thanks, John. Thanks, Peter. I did want to ask about, you talked a lot about the, kind of what's going on in the trade, and clearly the supply, it looks like you just need a little nudge on the demand side.
Right.
You just have a very kind of, you know, significant tightening in the market. Can you talk a little bit about what you're seeing in the iron ore flows into China, how that's kind of played out over the past few months, or maybe call it just the first six or seven months of this year, especially in relation to last year?
Yeah. So again, as I was mentioning, you know, everything you read about China, right, is so negative, and, you know, sometimes it even affects us when we get up in the morning and, you know, not a great wake up. But the reality is, year-over-year, iron ore is up 7% going into China. And I would say what we're even happier about is to see the recovery on the Brazilian volumes, because that is the most operating leverage in dry bulk shipping. It is the longest trade route, and even if we don't have one of our own ships, which we usually do, but on that trade route, the more volumes that come out of Brazil, the more ships that are taken out of the market for longer periods of time, which then increase freight rates.
Thank you. And then I guess. So it sounds like China, as you said, 7% up. Cape rates are down. We talked about the demand shock for, I guess, two quarters. Is it just ex-China? Is it the rest of the world, basically, that's been weaker on the iron ore front?
Yes, on the iron ore front, you do not have the normal trade route from Brazil going into Europe because the European steel industry has, you know, been in contraction for the last probably 18 months at this point. But, you know, again, we're starting to see, as Pete mentioned, a little bit of a recovery there. There's gonna be growth out of Brazil. There's gonna be a smaller amount, but growth out of Australia on iron ore and the bauxite trade, which is starting to really grow in terms of in West Africa going into China. But the percentage numbers are starting to be real, meaning, you know, 15%, 20% is actually meaning something because the volumes have really gotten up there. And we expect further growth on that trade.
Got it.
Quick one. Do you see any meaningful increase in energy transition materials, copper, lithium, that sort of stuff?
So those, that would be carried in the mid-size vessels, and I would tell you we haven't seen that much growth yet. I gotta believe it's coming, but we haven't seen it really.