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  • How The Baltic Dry Index Predicted 3 Market Crashes: Will It Do It Again? [View article]
    That article uses one months imports to China to make that assumption.
    The numbers for November 2014 were down even more, but the import numbers for December 2014 were close to a record high.
    You need to take a much longer time period before you can make these assumptions. Especially taking the month before the Chinese New Year starts.
    2014 had some bad months for shipping. And yet Chinese imports of iron ore were up 14% from 2013.
    Coal imports into China slowed because of greater Hydroelectric production.
    It's all about ship supply.
    If any of you read a Shipping report you'd know that.
    Feb 19, 2015. 09:09 PM | Likes Like |Link to Comment
  • How The Baltic Dry Index Predicted 3 Market Crashes: Will It Do It Again? [View article]
    No the BDI is listed in Time Charter Equivalent.
    All fuel expense has been removed from the number.
    Feb 19, 2015. 09:01 PM | Likes Like |Link to Comment
  • How The Baltic Dry Index Predicted 3 Market Crashes: Will It Do It Again? [View article]
    The ships lined up along the West Coast are containerships, and have nothing to do with the BDI.
    Feb 19, 2015. 08:59 PM | 2 Likes Like |Link to Comment
  • Weekly Indicators: Gallup Earns Its Bones Again, Possible Inventory Correction Edition [View article]

    ""and the BDI is primarily single hull shipping (e.g., oil).""

    No, the BDI is entirely dry bulk. Iron ore, coal, grains, and fertilizer.
    And demand for dry bulk is quite good, it's just that there are too many ships.

    Oil tankers are doing well. So are containers.
    Feb 15, 2015. 04:26 PM | Likes Like |Link to Comment
  • Shelter From The Storm [View article]
    The side of the road is littered with so called value seekers who caught a falling knife on Dry Bulk and and Coal sector stocks. Sometimes there is a very good reason why certain stocks are beaten to a pulp.
    Are you aware of how many ships in Safe Bulks fleet that will be exposed in 2015, to the worst charter rates in 30 years? And they have 6 new ships arriving this year that will add to the debt, and since ship values have fallen, they may require more cash. Lenders are only lending 60% of CURRENT market values.
    I have no idea what kind of screener brought you to SB, but there is nothing that replaces a close look at fundamentals.
    And where did you get that forward PE ratio?
    From Yahoo Finance? That kind of research will bankrupt you every time.

    It is true that you could get a nice, short term, spike in the price of coal or dry bulk stocks, because there are always contrarians without a clue.
    But it won't be because of hidden value. It's far more likely you'l get a suspended dividend. Or a secondary share offering.
    Feb 14, 2015. 07:34 PM | 2 Likes Like |Link to Comment
  • How To Make Money In The Dry Bulk Sector? [View article]
    Yes you are right of course.
    But I still think I should emphasize the fact that the rate is an average. And as you pointed out, the rally could be short lived. I would go so far as to say it WILL be short lived. And when the BCI fades again, it will bring the average down to a rather unremarkable TCE revenue number.
    And that investors have had a tendency to count a nice pop in the BDI, as "money in the bank".
    This index charter is a departure from Diana's usual business model. They expect to make more with this charter, eventually, than they would with a one year charter at today's period rate.

    I know that you are not in any way fanning the flames of euphoria in your article.
    You clearly state in your conclusion that this is a short term idea.
    And you give fair warning to the problems that still exist in the sector.

    But I suppose I never miss an opportunity to throw in my message of caution.
    As you know. These stocks can easily spike up because of the BDI, even when there ends up being no material increase in revenue for some of these companies.
    Feb 9, 2015. 01:23 PM | Likes Like |Link to Comment
  • How To Make Money In The Dry Bulk Sector? [View article]
    The Salt Lake City is not on spot charter.
    The spot, or voyage charter is for one trip for a fixed price.
    While the daily spot rate listed on the Baltic Exchange may fluctuate each day, that ship which has been chartered for a spot trip, that can last for months, or weeks, has it's charter locked in for that one trip. The charter is listed on a TCE daily basis to make it comparable to period charters.
    One of the things that the market doesn't understand is that the BCI could have a tremendous bump from VALE leasing a dozen Capes over one week. But it doesn't mean that the Cape making a trip from Australia to China, is getting anything close to that amount on a daily basis.

    The Salt Lake City is on a two year "index based charter". And a rise in the BCI will not " lead to an immediate jump in revenues made by this vessel for DSX."
    They will receive a payment based on the average rate over the term of the charter. And any bonus will not be received immediately.
    It is still a safer and probably more lucrative arrangement than spot, without the uncertainty of possible idle time. Or ballast legs.

    Diana explains it here.
    “The initial charter payment will be made on delivery of the vessel to the charterers based on the average of the four pre-determined time charter routes for the 15 days preceding the vessel's delivery date.

    “At the end of the time charter period, there will be a final settlement to reflect the average daily rate of the four pre-determined time charter routes for the actual duration of the charter. The charter is expected to commence during January 2015.”
    Feb 9, 2015. 11:36 AM | 1 Like Like |Link to Comment
  • Cliffs In Dire Straits [View article]
    The link is a link from the article that you linked to.
    Feb 6, 2015. 02:12 PM | Likes Like |Link to Comment
  • Cliffs In Dire Straits [View article]

    Quality has everything to do with aggregate production.
    It takes 50% more production of 20% FE iron ore, to make the same amount of concentrate, as it does with 30% FE iron ore.
    Feb 6, 2015. 01:58 PM | Likes Like |Link to Comment
  • Cliffs In Dire Straits [View article]
    According to Morgan Stanley, 52-million tonnes of Chinese output was eliminated last year, taking the county's total production last year to about 345-million tonnes.

    The China Iron & Steel Association said China's iron ore supply is likely to fall by 70-million tonnes this year and imports rise 7.1% to reach one-billion tonnes for the first time.

    A controversial strategy by mining giants Vale, BHP Billiton and Rio Tinto to saturate the Chinese market with imported ore to drive out local miners has driven prices down by more than half in the last year.

    China has a large number of small private iron ore mines with low efficiency, making them uncompetitive compared with top miners. State-owned iron ore miners are likely to be more resilient due to their lower cost and a desire to maintain employment.

    "There has been a clear split between state-owned and private mines. The private guys are out to make a quick buck and have shut down very quickly. The state ones are not so elastic," Ian Roper, commodity strategist of CLSA told the conference.

    Some private operators are surviving by concentrating their ore and selling it for higher prices, Pan told Reuters.

    The average grade of China's domestic iron ore fell to 20.7% last year from 31.2% in 2013 and average costs rose about 4% from 600 yuan ($96) a tonne a year ago, he said.

    Chinese iron ore concentrate output fell 5% to 299-million tonnes last year, much lower than the peak level of 369 million tonnes in 2007, he added.

    Pan expected China's import dependency ratio to rise to about 81% by 2017, and CISA sees imports taken by Australia and Brazil will grow to more than 80 percent this year from 77% in 2014.
    Feb 6, 2015. 09:58 AM | Likes Like |Link to Comment
  • Cliffs In Dire Straits [View article]

    Your article backs up my claims 100%.
    Read it.
    China's ore quality fell to 20% FE. That takes much more ore to produce one ton of steel. The Australian miners DID take market share.
    It took a concerted effort on the part of the Australian and Brazilian miners
    to raise production to the point of driving the price down below the domestic cost. A year earlier, with normal production, the price was $190 per ton. In years past, the miners were not willing to let the price drop.
    Shipping costs fell, mostly due to the fact that bunker fuel costs dropped from $44,000 per day, to around $24,000 per day
    Feb 6, 2015. 09:14 AM | Likes Like |Link to Comment
  • Cliffs In Dire Straits [View article]
    I don't have a conspiracy theory. I just gave you the facts.
    The article talks about the decline in demand for domestic Chinese steel.
    I'm addressing this statement from the author:

    ""To make matters worse, iron ore customers in China and other regions have reduced their demand and this has undoubtedly taken a toll on Cliffs Natural Resources.""

    Again, China's imports of iron ore rose 14% last year, higher than expectations. That is an increase in the demand for imported ore.
    And imported ore did replace SOME of the domestic supply. And is expected to replace more of the domestic supply in 2015.
    Feb 6, 2015. 08:44 AM | Likes Like |Link to Comment
  • Cliffs In Dire Straits [View article]
    I'll leave the debate about CLF to you guys.

    But I'd like to set the record straight on Chinese demand, and the price of iron ore.
    The crashing price of iron ore was from a deliberate attempt by Vale, BHP, and RIO, to put smaller, higher cost mines out of business. Especially the domestic mines in China. RIO can deliver iron ore to China for a break even price of $40 per ton FOB. And for BHP the cost is $50. Vale is between $50 and $60 depending on whether it is shipped on their own Valemax ships.
    They have an average ore quality of 62% FE. The domestic mines in China have a 33% FE content, and their costs are around $90 per ton.
    It wasn't from a lack of demand from China that iron ore prices dropped. It was the massive overproduction of the big three miners.
    China's imports were 932 million tons in 2014, which was a 14% increase from 2013. And, depending on how many Chinese mines do not reopen after the winter, China is expected to import over 1 billion tons in 2015.
    Feb 5, 2015. 07:18 PM | Likes Like |Link to Comment
  • Decline In Box Ships' Share Price Creates Rare Opportunity [View article]
    Well, I don't wish to belabor the point. But the expansion of the Panama Canal and the fact that the big liners are moving to the larger more efficient ships is going to render the Panamax 3,000 to 5,000 TEU, narrow beam, Panamax ship obsolete.
    Nobody is seeing an increase in their value any time soon.
    This is the latest shipping news:

    ""Further evidence of the parlous position for the Panamax sector came from Alphaliner this week, which reported that Maersk Line redelivered 13 unwanted long-term chartered ships of 3,600-4,200 teu back to German owner MPC, some two years ahead of the expiry of the charter thereby incurring a termination penalty of $39m.
    According to Alphaliner, the Hamburg-based managers of the KG company subsequently scrapped the ships, underwritten by a scrappage guarantee from the Danish carrier of around $126m as part of the charter party termination negotiations.
    Maersk Line no longer had use for the Panamax vessels, underlining its strategy of deploying the biggest ship possible on each trade, and MPC saw no prospects for other employment – scrapping was viewed as the only viable option.
    Consigning the redundant ships to lay-up was no doubt also considered, but this option is only viable if there is some light at the end of the tunnel in terms of improving employment prospects, and the gloomy long-term prospects for the Panamax sector also explains the artificially low level of laid-up tonnage – at 230,000 teu it is around 70% lower that of a year ago, and includes just 11 Panamax units compared with 75 vessels mothballed at the beginning 0f 2014.
    This situation suggests that owners are no longer prepared to sweat-out slack demand for their ships, while still paying mortgages and incurring lay-up costs, in the hope of better times ahead.""
    Feb 4, 2015. 09:41 AM | 1 Like Like |Link to Comment
  • Decline In Box Ships' Share Price Creates Rare Opportunity [View article]

    It's right there in his article.
    The number of TEU (Twenty foot equivalent units) is the size of the ship.
    Jan 20, 2015. 04:32 PM | 1 Like Like |Link to Comment