Dry Bits Week 4

Ahoy There!
Top & Bottom 5 Day: No Gainers ! >>> EGLE @4.11 -11.09%, GNK @11.53 -13.24%, BALT @8.53 -14.35%.
For once the entire dry bulk sector (all 16 equities) saw changes in share value that were in line with the shipping market fundamentals. All too often, we report share value gains that would appear to be unfounded. None of the equities should have gained last week, and none did. Well done street!!!

The Baltics: BDI @1137 -17.00%, BCI @1368 -12.08%, BPI @1337 -18.96%,
BSI @1209 -15.27%, BHSI @722 -7.07%. How bout the Panasisters giving it their best shot to overtake the Capes in a race to the bottom. Just when we thought nobody could match the misery inflicted on the Capesize owners, the Pannies prove there is truly strength in numbers. A few more fixtures and they might have breached the 20% weekly rate decay milestone. And let’s not forget the significance of the relatively stable handysize ladies rolling over and giving up a whopping 7%. Give it away girls, just give it away!

The Fixtures: Ore =15, Coal =7, Wheat =1, Petcoke =1, T/C =94, Period =6, Total =124.
W.O.W. The “ore chores” dropped by half, period activity dropped two/thirds, coal dropped ~ a third, and surprisingly period activity fell by 60% compared to last weeks 15 fixtures.

The Vessels: VLOC =0, Capes =19, Post Pmax =6, Kmax =5, Pmax =52, Smax =23,
Hmax =11, Hsize =3, Bulkers <30 =5, Total =124. The good news is zero super fatties (VLOC) fixed this week. They dilute the value of some of the metrics calculating vessel class utilization, and of course the overall fixture volume tally.

Familiar Vessels: Genco Acheron, MV Bonita, Nirefs, Newseas Pearl, Golden Endeavor.

Ski Notes: The “tone” of my posts is not intended to be insulting to the long, buy and hold, kind of shipping investors. Your investment criteria and strategy is not being questioned, nor is the wisdom of that decision. Good Fortunes
Ski

Negative Rates

Ahoy There!
This is probably not going to interest many of you folks, but some may find it readable.
We dug a little deeper into these reported negative rates as this just was not adding up. Remember, Boomer and I are both "slow steamers" so bare with us. Since Jan 13th 2011 the costs to charterers fixing on C11 have been negative. That is to say the ship owners are paying to have their vessel employed on journeys. In practicality, the owners are determined to reposition the vessel towards the supposed brighter employment capacity of the Atlantic. In reality, they find it to their benefit to fix a deal with a client that allows the client the use of the vessel holds and crew, and the ship owner helps pay for some of the voyage costs (current rate owner pays client $788 daily) the client would otherwise be forced to pay. This saves the owners enormous money compared to an outright ballast voyage. A win win deal they profess?

We at DryBits remain skeptical of the Baltic’s criteria allowing these fixtures in the route consideration without a greater discount being applied. The only good news would be this route C11 carries only a 5% weighting in the overall BCI calculation. An additional (-2%) adjustment might be a good initial correction the Baltic could levy, considering the increased prevalence of ballasting dictated by an increasing global fleet size. Should the Baltic Exchange drag their feet on this issue we may witness extended periods of routes operated at a loss. A bit of info about the Capesize Route C11 for any newer observers follows. Per the Baltic;
C11 172,000 T/C Delivery China-Japan, redelivery ARA or passing Passero, duration about 65 days 5%. C11 =Route, 172,000 = Vessel size, T/C = Cargo, Delivery China-Japan, redelivery ARA or passing Passero, duration about 65 days = Route description, 5% = Weightings.

All in all, we know ballasting will continue as long as owners find themselves in unprofitable discharge and or redelivery locales. The propensity for logical vessel ballasting will increase with global fleet size, and it would be a service to the market if the Baltic compensates for the flawed metric. The Baltic failed to intervene when ships got scarce and rates soared uncontrollably beyond reason. None of us complained I am sure. Perhaps if they had discounted the peak, we would not have seen the astronomical rates that glazed the owner’s eyes and led them on a record spending spree that we now live with. When routes are experiencing extremes and the effects are allowed to impact the broader index, the results are snowballed into all the routes. Not a fan of over regulation, but improvement could be possible. Yes, this would impact the same rate system that allows the tremendous rate jumps we so enjoy. Danged if they do, danged if they don’t.

Good Fortunes
Ski

Rest In Peace

Ms Balei Chinski
Just as we said it would be.

When you passed from this life we were still on each others favorite list, and our bond was set forever in time. A great friendship between a niece and her uncle that now will truly last an eternity, and cannot be undone by any circumstance.

You told me your favorite memory of me, your “Uncle Dave” was when we sneaked away and I had you on my lap and you were driving my crown victoria along river road (you were about 10 years old then) while our large family enjoyed the fourth of July at my river house. Nobody ever found out about it, and how hard we laughed!!

My favorite memory is when you let me take you out “tubing” on the river, when you were afraid to go in the water with anyone else but me, and you had not been feeling all too well. I helped you put on your vest real tight, and before you knew it we were being hauled across the water at around 30 knots. I still think there are marks on my arm from you holding on so tight as you laughed and said “we are gonna crash”. We didn’t crash but we did have a lot of fun.


Rest in Peace Balei Boo
Your forever Loving Uncle Dave

Dry Bits Week 3

Ahoy!

Top & Bottom 5 Day: TBSI @3.84 +1.58%, FREE @3.64 +0.50%, SHIP @0.93 -1.06% >>> GNK @13.29 -6.99%, DRYS @5.00 -7.57%, EXM @5.03 -10.01%. The dry bulk sector is comprised of 16 equities as compiled by CLS. The four trading days this week had all but 2 companies in the red. As we here at Dry Bits see it, none of the equities provided the market sufficient reason to advance. The senior note offering from EXM helped push the operator of 49 vessels to the top laggard position.

The Baltics: BDI @1370 -4.79%, BCI @1556 -2.41%, BPI @1650 -14.19%, BSI @1427 +2.44%, BHSI @777 +1.56%. The Panamax average rates got crushed when owners fix cheap, examples Guang Ming Feng @$3,500 daily, and the Great Inteligence @$4,000 daily. These are both Panamax vessels and that fleet currently shows avg spot @$13,646 daily. The panelist at the Baltic can only discount the fixture compared to its grouping, they cannot compensate for desperate owners.

The Fixtures: Ore =29, Coal =10, HSS =2, Salt =1, Phosrock =1, T/C =94, Period =15, Total =152. This has been the most robust week in a long time for both Ore and Coal activity. The weather has spurned a good number of irregular transactions, yet the reality being the available tonnage has now become sufficient to absorb the upward pressures that normally lifted rates.

The Vessels: VLOC =2, Capes =38, PPmax =2, Kmax =6, Pmax =50, Smax =30, Hmax =13, Hsize =4, Bulkers <30K =7, Total =152. The Capes nailed all the “Ore Chores” if we include the 2 vloc’s. The 4 week average cape employment was 22.75 vessels fixed per week until now we report 40. This jump in vessel employment also used to normally provide rate support!

Familiar Vessels Listed: Navios Hope, Navios Magellan, Felicia, Torm Orient, Thetis,STX Begonia, Malauika, SFL Hudson, Navios Fantastiks.

Ski Notes: The Panamax fixtures I highlighted as being cheap warrant some editorial clarity. Our resident analyst Boomer James reminds us what his favorite “shipping chick” Angel Babe Frangou says about fixtures. “there is more to a fixture than meets the eye”. It remains a fact that sometimes fixtures are actually used to reposition vessels that were going to be repositioned at company expense. This is to the owners benefit and criticism will not penetrate the logic. We could list a whole bunch of reasons to take cheap freight. The fact remains the owners face shooting themselves in the foot if suddenly a group of owners all “need” to accept unprofitable hire. I have read about negative rate proposals actually being considered. Any and all negative fixtures I can only suspect illegal motivations are involved. Then again, I lead a sheltered life here in rural Illinois. Go Bears!Good Fortunes

Ski

Fixture Notes;

Ahoy There!
For those who follow the dry bulk fixtures; read on if you care.

We have noticed a couple of interesting developments unfold during the week. First and foremost, the volume (amount) of iron ore fixtures inked in the week is 29 compared to the 4 week average of 14.5. This is a 102% improvement and also brings us to another point. Without exact statistics we remind DB readers we hope for at least 30 ore fixtures per week when the market is functioning normally. This week’s reported 29 fixtures could be considered on target because two of the vessels employed are actually VLOC class bulkers combining to haul 464,000 DWT of ore. The two super sized vessels are going to carry ~ four 120K capesize loads skewing the fixture totals. Here at Dry Bits we have decided to begin considering VLOC separate from the Capes, and anticipate the need to revisit our fixture volume analysis. We could possibly use dwt but for a part time guy this brings up a heavy analytical workload. At the end of the day is it really is more important.. not sure yet.

The weather has helped some irregular fixing this week as witnessed by the large amounts of coal taken from US > Brazil unloading @ the PRAIA MOLE. We do not normally report much US coal heading due south, but the heavy rains in Brazil must have tightened local supplies. Speaking of South America, the weeks fixture reports indicate Vale was completely absent from the charter market.

All in all the fixtures this week are at the most robust levels seen in a while, and that is very good news.

Good Fortunes
Ski

Dry Bits Week #2

Ahoy There!
Top & Bottom 5 Day: NM @5.53 +2.59%, SHIP @.94 + 2.17%, TBSI @3.78 +1.61% >>>
GNK @14.29 -4.15%, FREE @3.62% -4.23%, BALT @10.24 -5.88%. The equities had a mostly dull week with Peter Pan’s spot operation (BALT) taking the laggard billet for the sector again, dropping over 5%. Boomer James has closed his bottom feeder position with TBSI thinking the small wave lost steam.

The Baltics: BDI 1439 -5.26%, BCI 1595 -14.47%, BPI 1923 -0.67%,
BSI 1393 +3.87%, BHSI 765 -0.64%. The big ladies lose another ~15% during the week.
Spot 4 TCE Average Earnings
Capesize spot=$9,692 daily … 77% drop from this day last year!
Pmax spot =$15,341daily
Supra’s spot $14,570 daily

The Fixtures: Ore =14, Coal =5, HSS =1, Corn =1, T/C =105, Period =18, Total =144. The folks watching EGLE will probably want to have a look at why they chartered in the 75,000dwt Panamax named Barito to haul coal from DAVANT >>AMSTERDAM. Without looking I will say this is often covering of a COA.

The Vessels: Capes =29, PPmax =7, Kmax =8, Pmax =65, Smax =28, Hmax =2,
Hsize =3, Bulkers =2, Total =144. We cannot recall seeing this many Post Panamax vessels fixed during a single week.
The volume of Capesize fixtures (29) is the most seen in a while as they took all but 1 of the 14 listed ore fixtures.

Familiar Vessels: Navios Pollux, Baltic Jaguar, Navios Aurora,
Newlead Esmerelda, SOLIDARNOSC. POLACKO all the way…

Ski Notes: This report was somewhat impaired by our weak effort this weekend… we enjoyed watching the NFL playoffs instead.
Go Bears!

Dry Bits Week 1

Top & Bottom 5 Day: BALT 10.88 +6.56%, GLBS 10.11 +11.58%, TBSI 3.72 +28.27% >>>
SHIP 0.92 no change, PRGN 3.40 -0.87%, DRYS 5.40 -1.63%. The folks that did not expect to see TBSI a leader and DRYS a laggard have not been reading Dry Bits. The equities enjoyed a week of separation from the Baltic guidance, but buyers beware! Share prices follow Baltic direction.

The Baltics: BDI @1519 -14.32%, BCI @1865 -20.50%, BPI @1936 +4.93%,
BSI @1341 -10.18%, BHSI @770 -7.11%. The Cape routes dropping over 20% should cause restlessness. As predicted the Cape/Pmax ratio has inverted and assumes Kadywhompus status. Average TCE rates for Supramax and Panamax vessels are both higher than the Capesize earnings.

The Fixtures: Ore =12, Coal =5, Petcoke =1, T/C =49, Period =4, total =71. We only have 3 days of data verses the normal 5 days

The Vessels: Capes =18, PPmax =0, Kmax =5, Pmax =26, Smax =18, Hmax =1,
Hsize =1, Bulkers <30K =1, total =71.

Familiar Vessels: Genco Cluadius, Newlead Victoria

Ski Notes: I read an article by a well known industry observer blaming the Cape rate disaster this week on the flooding in Australia. We are of the opinion that foul weather supports rates and the huge drop witnessed this week during the Australian downpour is all the more foretelling of how bad things are getting. With the exception of TBSI and perhaps Globus, none of the bulker equities should have gained in the wake of the Baltic’s decay. Who was it that called American shipping investors stupid?

Good Fortunes
Ski

2010 Dry Bulk Share Price Performance

2010 Dry Bulk
Top to Bottom
Yearly Share Price Performance

Our hats are off to Angel and her faithful shareholders @ NMM. As a professional courtesy our Dry Bulk analyst Boomer James has promised not to remind readers that he predicted the company’s success. That would be bragging. When we are examining share price performance, it may surprise some that DRYS outperformed EXM, NM, DSX, PRGN, BALT, GNK, TBSI & SHIP.

Navios Maritime Partners +31.50%.
Safe Bulkers + 1.14%.
Eagle +0.60%.
Star Bulk -5.31%.
Dry Ships -5.67%.
Excel Maritime -8.60%.
Navios Maritime -12.72%.
Diana -16.98%.
Paragon -24.61%.
Baltic Trading -26.80%.
Genco -35.65%
TBSI -60.54%.
Seanergy -68.60%.
Free Seas reverse split
Ocean Freight reverse split
Globus insufficient data
*The calculations are based on closing prices December 31st 2009.

Good Fortunes
Ski

Weekly Report

Ahoy There!
For thoses readers that reside outside the USA I am from Illinois and a diehard NFL Chicago Bears fan and today we play the Cheeseheads from Green Bay so the report is running late. Wont be a regular post as no fixture data or baltic number info can be sourced for the week gone bye. I will find something to talk about we are sure.

Dave