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DryShips Inc.: A 400% Stock I Missed

You can bring up a lot of links just by googling "Port Congestion" for China or Australia.

Notes from DSX conference call...

Port congestion: Australian coal - 40 ships waiting at Newcastle, down from 70 earlier in the year. Congestion should moderate but not evaporate. Congestion only helps to point of diminishing returns.

China demand for iron ore and coal fuels freight rates, says CISA

"Scarcity of available vessels is mainly driving dry bulk rates upwards. There is heavy congestion in Australian ports where the average wait time for loading a vessel is estimated at 32 days. An analyst said that "That causes capacity to be taken out of the market." He added that as of late last week there were 66 ships waiting to be loaded at Newcastle port in mid July and there is also congestion in other Australian ports."
www.steelguru.com/sele...

According to reports, the vessels waiting for berths at Newcastle had recently risen to 70, since congestion hit the port towards 2006-end, with maintenance work on rail tracks aggravating the situation. Currently, the minimum waiting time for a vessel to get berth is reported to be 20 days at the Australian port.
www.thehindubusinessli...

Atlantic iron ore freight rates plummet on easing port congestion
www.platts.com/Metals/...

DryShips Inc.: A 400% Stock I Missed

One of the things that isn't being discussed here is the capacity constraints of the Australian ore terminals feeding China's ore demands.

Dry-bulk carriers move loads of iron ore, coal and steel. China, the biggest iron ore importer, buys its iron ore mainly from Australia and Brazil.

The wait times at terminals like Newcastle in Australia this summer were reported to be as long as 32 days. In July they had over 60 ships waiting to load and unload at Newcastle. Dalrymple Bay was almost as bad.

The result has choked off world's supply of cheap commodities because of capacity constraints, causing the futures exchanges to bid limit up. This could make demand appear much higher than it actually is.

Current wait times however seem to be down to about 3 weeks. As wait times fall a lot of ships will free up and freight rates will continue to fall. If commodity prices have been propped up by capacity constraints they could well see a steep drop in the near future.