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